The 2010 U.S. market plunge caused by rapid automated trading was called the Flash Crash.
On May 6, 2010, U.S. stock indexes suddenly dropped and then recovered much of the loss within minutes. The Dow Jones Industrial Average fell about 1,000 points, or roughly 9%, before rebounding.
Investigations found that a large automated sell order, combined with high-frequency trading and stressed market conditions, helped produce an extreme feedback loop. Some individual securities briefly traded at absurd prices, including shares that appeared to fall to a penny or rise to hundreds of thousands of dollars.
The U.S. Securities and Exchange Commission and Commodity Futures Trading Commission later concluded that trader Navinder Singh Sarao’s spoofing contributed to the event, though it was not the sole cause. The crash led to circuit-breaker changes designed to pause trading during extraordinary moves.