The 2010 market collapse that erased nearly $1 trillion in U.S. equity value within minutes was the Flash Crash.
On May 6, 2010, U.S. stock indexes suddenly plunged and then recovered much of the decline. The Dow Jones Industrial Average briefly fell almost 1,000 points, an extraordinary move for a short period. Many individual securities experienced extreme and temporary price swings.
Investigations linked the episode to a combination of high-frequency trading, automated selling, market fragmentation, and a large sell order. Regulators later prosecuted trader Navinder Singh Sarao for spoofing-related conduct connected with the event, although the broader market episode involved multiple interacting mechanisms.
The Flash Crash is distinct from a conventional bear market because its defining feature was speed and partial recovery within minutes. It helped motivate stronger market safeguards, including improved trading pauses and coordination among exchanges.