The 2010 trading event that briefly erased nearly $1 trillion from U.S. stock values was the Flash Crash.
On May 6, 2010, major U.S. stock indexes plunged within minutes before recovering much of the decline. The Dow Jones Industrial Average briefly fell about 1,000 points, then rebounded. The episode wiped out and rapidly restored an estimated hundreds of billions of dollars in market value.
A joint investigation by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission concluded that a large automated sell order in E-mini S&P 500 futures interacted with high-frequency trading and market conditions. Their report described a feedback loop of selling and liquidity withdrawal.
The event exposed weaknesses in fragmented, highly automated markets. Some individual securities briefly traded at absurd prices, while many others were canceled or corrected. It was not a conventional multi-year bear market like the crash associated with the dot-com bubble.