The Flash Crash was the event on May 6, 2010, when U.S. share prices plunged and recovered within minutes.
During the episode, the Dow Jones Industrial Average dropped about 1,000 points, roughly 9%, before recovering much of the loss. Some individual securities briefly traded at extremely low prices. The rapid reversal made the event different from a conventional bear market, which typically develops over weeks, months, or years.
Investigations focused on automated trading, market liquidity, and a large sell order in E-mini S&P 500 futures. A 2014 U.S. government report concluded that one trader’s algorithmic order helped trigger the crash, while high-frequency traders and other market conditions amplified it. The event led regulators and exchanges to introduce stronger circuit breakers and safeguards against disorderly trading.