The sudden U.S. stock-market plunge on May 6, 2010, was called the Flash Crash.
During the afternoon of May 6, major U.S. stock indexes fell rapidly before recovering much of the loss within minutes. The Dow Jones Industrial Average dropped about 1,000 points, nearly 9 percent, during the session. Many individual securities experienced extraordinarily large and temporary price movements.
Investigations found that automated trading and market conditions interacted in destabilizing ways. A large sell order in futures markets contributed to the pressure, while high-frequency traders rapidly reduced liquidity. Regulators later introduced safeguards, including circuit breakers and rules addressing clearly erroneous trades.
The event did not resemble a conventional recession-driven bear market because its most dramatic losses and recovery occurred within a single trading day. It also showed how computerized trading systems could transmit stress across markets faster than human traders could respond.