The abrupt May 6, 2010 plunge in U.S. stock markets is known as the Flash Crash.
During the afternoon of May 6, major U.S. equity indexes fell rapidly and then recovered much of the decline within minutes. The Dow Jones Industrial Average dropped about 1,000 points, roughly 9 percent, before rebounding. The episode briefly erased nearly $1 trillion in market value, although estimates vary depending on the measurement period.
Investigations concluded that automated and high-frequency trading interacted with unusually tense market conditions and a large sell order in E-mini S&P 500 futures. A later U.S. Justice Department case identified trader Navinder Singh Sarao as a participant whose spoofing activity contributed to the event, but regulators emphasized that the crash had multiple interacting causes.
The Flash Crash differs from historic multi-day crashes such as 1929 or 1987. Its defining feature was the extraordinary speed of the fall and partial recovery.