The 2010 Flash Crash occurred on May 6, 2010, when U.S. stocks plunged and rapidly recovered within minutes.
During the afternoon, major U.S. indexes dropped sharply, with the Dow Jones Industrial Average losing roughly 1,000 points at its low. Many individual securities experienced extreme, short-lived price movements before much of the market recovered.
Regulators concluded that a large automated sell order, combined with stressed market conditions and high-frequency trading activity, helped accelerate the decline. The precise mechanics involved interactions among trading algorithms, liquidity providers, and fragmented electronic markets.
The event prompted new safeguards, including circuit breakers and coordinated procedures for reviewing clearly erroneous trades. It demonstrated that computer-driven trading could transmit pressure across markets at extraordinary speed, even without a conventional economic shock.