The 2010 event in which U.S. markets briefly lost about $1 trillion in value was the Flash Crash.
On May 6, 2010, major U.S. stock indexes fell rapidly and then recovered much of the decline within minutes. The Dow Jones Industrial Average dropped nearly 1,000 points, or about 9%, during the session. Many individual securities briefly traded at extremely low prices before normal conditions returned.
Investigations linked the episode to interactions among high-frequency trading, automated selling, and market liquidity. A large sell order in E-mini S&P 500 futures helped initiate heavy trading, while automated systems and reduced liquidity amplified the movement. Regulators later introduced or strengthened safeguards, including circuit breakers and rules against disruptive trading.
The Flash Crash differed from a conventional long bear market such as the 1929 or 2008 crashes. Its defining feature was speed: the most dramatic movement happened within minutes and was partly reversed the same day. The event remains a major case study in electronic market structure.