The 2010 U.S. market plunge that briefly erased about $1 trillion was called the Flash Crash.
On May 6, 2010, major U.S. stock indexes fell rapidly and then recovered much of the loss within minutes. The Dow Jones Industrial Average dropped about 1,000 points, or roughly 9 percent, during the session. The decline temporarily erased approximately $1 trillion in market value before prices rebounded.
Investigations identified a large sell order in E-mini S&P 500 futures and the interaction of automated trading systems as important factors. High-frequency traders and other algorithms responded to changing prices and liquidity conditions, intensifying the move. Regulators also found that some individual stocks briefly traded at extremely abnormal prices.
The Flash Crash differed from a conventional bear market because its most dramatic movement occurred within minutes and was followed by a partial recovery. It encouraged new controls, including single-stock circuit breakers and market-wide trading pauses. It also demonstrated how electronic market structure can affect the speed of a modern crash.