What event caused U.S. stock markets to plunge nearly 1,000 points on May 6, 2010?

The 2010 Flash Crash caused U.S. stock markets to plunge nearly 1,000 Dow Jones Industrial Average points on May 6, 2010.

During the afternoon of May 6, major U.S. equity indexes dropped extremely quickly before recovering much of the loss. The Dow fell about 998.5 points, or roughly 9%, in a matter of minutes. Some individual securities briefly traded at extraordinarily low prices.

Investigations found that automated trading, market liquidity problems, and a large sell order were important parts of the episode. A joint report by U.S. regulators described how selling pressure interacted with high-frequency trading and rapidly changing market conditions.

The event differed from a conventional crash because much of the decline and recovery happened within minutes. It prompted new safeguards, including circuit breakers designed to pause trading during extreme price movements.