The 2010 U.S. market plunge that erased nearly 1,000 Dow points intraday was called the Flash Crash.
On May 6, 2010, major U.S. stock indexes fell rapidly and then recovered much of the decline within minutes. The Dow Jones Industrial Average dropped nearly 1,000 points at its worst point, while some individual securities briefly traded at extraordinarily low or high prices.
Investigations identified a combination of factors rather than a single ordinary news event. A large sell order, high-frequency trading, market fragmentation, and liquidity withdrawal interacted in a stressed market. Regulators later described how automated systems could reinforce one another during abrupt conditions.
The Flash Crash differed from a conventional bear market because its most dramatic movement occurred within minutes and was partly reversed the same day. The episode led to reforms including single-stock circuit breakers and changes to market safeguards.