The market crash of May 6, 2010, caused partly by automated trading, was called the Flash Crash.
In a matter of minutes, U.S. equity markets experienced an extraordinarily rapid plunge and partial recovery. The Dow Jones Industrial Average briefly fell by about 1,000 points, nearly 9%, before recovering much of the loss. Individual stocks and exchange-traded funds sometimes traded at wildly abnormal prices.
Investigations found that a large automated sell order in E-mini S&P 500 futures interacted with high-frequency trading and reduced market liquidity. The exact sequence was complex, but regulators concluded that automated strategies amplified the movement after selling pressure increased.
The crash led to new safeguards, including market-wide circuit breakers and tighter controls for individual securities. It is different from a conventional bear market because the most dramatic price movement happened within minutes and was substantially reversed the same day. Later investigations also resulted in criminal charges against trader Navinder Singh Sarao.