What event on May 6, 2010 caused a sudden, severe intraday plunge in U.S. stock indexes?

The Flash Crash caused a sudden, severe intraday plunge in U.S. stock indexes on May 6, 2010.

During the afternoon, major U.S. equity indexes dropped rapidly before recovering much of the loss. The Dow Jones Industrial Average briefly fell nearly 1,000 points, then a large portion of the decline reversed within minutes. Some individual securities traded at bizarrely low or high prices.

Investigations concluded that automated high-frequency trading and a large sell order in E-mini S&P 500 futures interacted with fragile market conditions. The event demonstrated how electronic markets could transmit selling pressure at extraordinary speed. A later U.S. Justice Department case identified trader Navinder Singh Sarao as a contributor through spoofing activity, though the broader event involved complex market interactions.

The crash led to stronger controls, including single-stock circuit breakers and market-wide safeguards. It is different from a traditional prolonged bear market because its defining feature was an abrupt, largely intraday disruption.