The nickname for the rapid 2010 U.S. market plunge and rebound within minutes is the Flash Crash.
On May 6, 2010, major U.S. equity indexes dropped sharply and then recovered much of the loss in a very short period. The Dow Jones Industrial Average briefly fell by about 1,000 points, approximately 9 percent, before rebounding.
Investigations linked the event to interactions among high-frequency trading, automated order systems, market liquidity, and a large sell order. The precise market mechanics were complex, and the episode showed that computerized trading could transmit instability extremely quickly across connected venues.
The Flash Crash differs from conventional crashes such as 1929 or 1987 because its defining feature was speed and partial recovery within minutes, rather than a prolonged multi-session collapse. Regulators subsequently strengthened safeguards, including circuit breakers and mechanisms for reviewing clearly erroneous trades.