The 2010 U.S. market event in which the Dow briefly plunged about 1,000 points was the Flash Crash.
On May 6, 2010, major U.S. equity indexes fell rapidly and then recovered much of the loss within minutes. The Dow Jones Industrial Average dropped nearly 1,000 points, or about 9%, before rebounding. Some individual securities briefly traded at extremely unusual prices.
Investigations found that automated trading and deteriorating liquidity played major roles. A large sell order in E-mini S&P 500 futures was executed using an automated algorithm, while high-frequency traders and other market participants reacted to rapidly changing conditions. The precise interaction of these systems made the event unusually fast and complex.
The crash led regulators and exchanges to strengthen safeguards, including market-wide circuit breakers and procedures for reviewing clearly erroneous trades. In 2015, U.S. authorities charged trader Navinder Singh Sarao with spoofing and market manipulation connected to the event; he later pleaded guilty. The Flash Crash was not the same as the 1987 Black Monday collapse, which unfolded over a broader global trading day.