The sudden U.S. stock-market plunge on May 6, 2010, was the Flash Crash.
During the afternoon session, the Dow Jones Industrial Average dropped nearly 1,000 points, losing about 9% of its value within minutes before recovering much of the decline. Individual securities and exchange-traded products experienced extraordinarily wide price movements, with some trades executed at absurdly low or high prices.
Investigations linked the event to interactions among high-frequency trading, automated orders, market liquidity, and a large sell order in E-mini S&P 500 futures. The episode showed how computer-driven trading systems could amplify a move when liquidity suddenly disappeared. A British trader, Navinder Singh Sarao, was later convicted in the United States for spoofing-related conduct connected with the event, although the crash involved broader market mechanisms.
The Flash Crash differed from a conventional bear market. It was extremely rapid and partly reversed the same day, rather than a prolonged collapse caused by a long economic downturn. Regulators subsequently introduced or strengthened measures such as trading pauses and price limits.