The extremely rapid U.S. stock-market plunge and rebound on May 6, 2010, is called the flash crash.
During the afternoon of May 6, major U.S. equity indexes fell rapidly before recovering much of the loss within minutes. The Dow Jones Industrial Average briefly dropped nearly 1,000 points, or about 9%, making the event one of the most dramatic intraday disruptions in modern market history.
Investigations found that automated trading, market liquidity problems, and a large sell order contributed to the episode. The U.S. Securities and Exchange Commission and Commodity Futures Trading Commission concluded that a trader’s algorithmic sale of E-mini S&P 500 contracts helped trigger a severe liquidity imbalance, although the event involved several interacting factors.
The flash crash differed from a conventional bear market because it unfolded and partly reversed in a very short period. It also led exchanges and regulators to introduce or strengthen safeguards, including single-stock circuit breakers and market-wide trading pauses.