The sudden 2010 U.S. market plunge and rapid partial recovery within minutes is known as the flash crash.
On May 6, 2010, major U.S. equity indexes dropped rapidly before recovering much of the loss. The Dow Jones Industrial Average briefly fell by about 1,000 points, roughly 9%, during the session. Thousands of trades were executed at unusually low or high prices, although many were later canceled under exchange rules.
Investigations by U.S. regulators concluded that a large automated sell order, combined with stressed market conditions and high-frequency trading activity, helped intensify the decline. The event exposed weaknesses in fragmented electronic markets and in the interaction between human and algorithmic trading.
The term flash crash describes the speed and temporary nature of the disruption, not a conventional long-lasting bear market. It is also distinct from the 2013 flash freeze and later brief algorithm-driven market shocks. After 2010, regulators introduced or strengthened safeguards such as circuit breakers and price bands.