The 2010 U.S. Flash Crash occurred on May 6, 2010.
During the afternoon of May 6, major U.S. stock indexes suddenly plunged before recovering much of the loss. The Dow Jones Industrial Average fell about 1,000 points, approximately 9 percent, within minutes. Thousands of trades occurred at extremely low or high prices before markets stabilized.
Investigations by U.S. regulators concluded that a large automated sell order, combined with high-frequency trading and stressed market conditions, helped create a rapid liquidity crisis. A later U.S. Justice Department case identified trader Navinder Singh Sarao as a participant whose spoofing activity contributed to the event, although the crash resulted from interacting factors.
The Flash Crash differed from a conventional bear market because its most dramatic movement happened within minutes and was partly reversed the same day. It led to reforms including trading pauses and tighter market controls.