The Flash Crash is the name given to the extreme intraday U.S. market collapse and rebound on May 6, 2010.
During the afternoon of May 6, major U.S. equity indexes and individual securities fell sharply within minutes. The Dow Jones Industrial Average briefly lost almost 1,000 points, at that time its largest intraday point decline, before recovering much of the loss. Prices in some securities traded at absurdly low or high levels.
Investigations found that high-frequency trading, automated strategies, thin liquidity, and a large sell order interacted in ways that accelerated the collapse. The U.S. Securities and Exchange Commission and Commodity Futures Trading Commission later described a complex sequence rather than a single simple cause. A trader, Navinder Singh Sarao, was prosecuted in connection with spoofing-related activity, although the official explanations emphasized interacting market mechanisms.
The event encouraged reforms including circuit breakers and limits on clearly erroneous trades. It differs from a traditional multi-day bear market because the most dramatic movement and much of the recovery happened within one session.