The 2010 event when U.S. stock prices plunged and quickly rebounded was called the Flash Crash. It occurred on May 6, 2010, during an already volatile market session.
The Dow Jones Industrial Average temporarily lost nearly 1,000 points, roughly 9%, within minutes. Prices in some individual securities moved to extremely low or high levels before recovering rapidly.
Investigations found that automated trading and a large sell order in E-mini S&P 500 futures interacted with existing market conditions. The precise market mechanics were complex, and the event exposed weaknesses in how electronic trading systems handled extreme order flow.
The Flash Crash led to new safeguards, including single-stock circuit breakers and market-wide limit-up and limit-down mechanisms. Navinder Singh Sarao was later charged in connection with spoofing activity, although regulators also emphasized the broader market structure involved.