The sudden 2010 U.S. market plunge and rebound was called the Flash Crash.
On May 6, 2010, major U.S. equity indexes and individual securities dropped rapidly before recovering much of the loss within minutes. The Dow Jones Industrial Average briefly fell nearly 1,000 points, then rebounded. The most violent phase lasted about 36 minutes.
Investigations linked the event to a combination of existing market stress, automated trading, and a large sell order. The U.S. Commodity Futures Trading Commission and Securities and Exchange Commission concluded that a trader’s algorithmic order in E-mini S&P 500 futures helped amplify the movement, while liquidity rapidly disappeared from parts of the market.
The event showed how modern electronic markets can move at extraordinary speed. It also exposed the difficulty of determining a single cause in a system where many algorithms interact. Regulators later introduced measures including coordinated circuit breakers and restrictions on clearly erroneous trades.