What term describes the May 6, 2010 U.S. market plunge and rapid recovery?

The May 6, 2010 U.S. market plunge and rapid recovery is known as the Flash Crash.

On May 6, 2010, major U.S. stock indexes fell sharply within minutes before recovering much of the loss. The Dow Jones Industrial Average temporarily dropped nearly 1,000 points, an extraordinary move for that period. Many individual securities also traded at prices far outside their recent ranges.

Investigations linked the event to a combination of market stress, automated trading, and a large sell order in futures. Trading systems interacted in ways that drained liquidity, meaning fewer buyers were available when selling accelerated. The precise role of individual actions and algorithms was examined for years.

The episode led exchanges and regulators to strengthen circuit breakers, price bands, and coordination procedures. It differed from a traditional multi-day crash because its most dramatic movement happened extremely quickly and was followed by a partial rebound.