The nickname Flash Crash was given to the sudden U.S. equity-market plunge on May 6, 2010, linked to high-frequency and automated trading.
During the afternoon, major U.S. indexes dropped rapidly before recovering much of the loss. The Dow Jones Industrial Average briefly lost almost 1,000 points, while many individual securities experienced extreme and temporary price movements.
Investigations found that automated trading, thin liquidity, rapid order cancellations, and a large sell order contributed to the event. A later U.S. investigation charged trader Navinder Singh Sarao with market manipulation, although the crash resulted from interacting systems rather than one simple mechanical cause.
The episode differed from a conventional bear market or banking panic. It unfolded within minutes and many prices later returned toward earlier levels. Regulators responded with measures including circuit breakers and stronger controls on disruptive trading.