The 6 May 2010 market event in which U.S. indexes plunged and quickly recovered was called the Flash Crash.
During the afternoon of 6 May, major U.S. equity indexes fell sharply in minutes. The Dow Jones Industrial Average dropped about 1,000 points, or roughly 9%, before recovering much of the loss. Some individual securities briefly traded at extremely low or high prices, creating disorderly conditions across markets.
Investigations concluded that automated trading, market liquidity problems, and a large sell order in E-mini S&P 500 futures interacted to amplify the decline. The event demonstrated how electronic markets could transmit stress at extraordinary speed. It was not a conventional, multi-day crash caused by a single broad economic announcement.
Regulators introduced or strengthened safeguards afterward, including circuit breakers and limit-up/limit-down mechanisms. Authorities also pursued legal action against a trader whose spoofing and market-manipulation conduct was linked to the event, while broader market-structure factors remained important. The name “flash” refers to the speed of the fall and rebound.