The event that caused the Dow to plunge nearly 1,000 points on May 6, 2010, was the Flash Crash.
During the afternoon of May 6, U.S. stock markets experienced an extraordinarily rapid sell-off and partial rebound. The Dow Jones Industrial Average fell nearly 1,000 points, or about 9%, within minutes before recovering much of the loss.
Investigations by U.S. regulators concluded that a large automated futures trade, combined with stressed market conditions and high-frequency trading activity, helped trigger and magnify the disruption. Some individual securities briefly traded at wildly abnormal prices.
The event demonstrated how electronic markets could move faster than traditional oversight and liquidity systems. Exchanges and regulators subsequently strengthened circuit breakers, trade-cancellation rules, and monitoring. The Flash Crash is distinct from a conventional bear market because its most dramatic movement happened in minutes rather than over months or years.