The 2010 event in which U.S. markets briefly plunged and rapidly recovered was the Flash Crash.
On May 6, 2010, major U.S. stock indexes fell extremely quickly before recovering much of the loss within minutes. The Dow Jones Industrial Average briefly dropped nearly 1,000 points, while individual securities experienced unusually large and sometimes contradictory price movements.
Investigations concluded that automated trading and market structure played important roles. A large sell order, combined with high-frequency trading and reduced liquidity, helped amplify the move. Regulators later charged trader Navinder Singh Sarao with contributing to the event through spoofing, although the wider episode involved multiple interacting forces.
The Flash Crash differed from a conventional bear market because its most dramatic movement was extraordinarily brief. It led to changes including circuit breakers, single-stock trading pauses, and additional monitoring of algorithmic trading. The event showed how electronic markets could transmit stress in seconds.