What name is given to the May 6, 2010 U.S. market plunge and rapid rebound?

The May 6, 2010 U.S. market plunge and rapid rebound is called the Flash Crash. The Dow Jones Industrial Average fell about 1,000 points, or roughly 9%, during the session before recovering much of the loss.

The episode was unusually fast. Many securities, including exchange-traded funds and individual stocks, experienced extreme temporary price movements. Some trades were later canceled under market rules because prices were considered clearly erroneous.

Investigations identified a combination of factors rather than one simple cause. A large automated sell order, high-frequency trading activity, fragmented markets, and rapidly changing liquidity interacted during the event. The U.S. Securities and Exchange Commission and Commodity Futures Trading Commission examined the episode in detail.

The Flash Crash encouraged reforms such as market-wide circuit breakers and better controls for automated trading. It was distinct from a conventional, sustained bear market because prices recovered significantly within minutes.