The 2010 market disruption in which U.S. stocks briefly plunged and rebounded within minutes was called the Flash Crash.
On May 6, 2010, major U.S. equity indexes experienced an exceptionally rapid fall followed by a partial recovery. The Dow Jones Industrial Average temporarily lost nearly 1,000 points, a move that was extraordinary even though much of it reversed before the close. Thousands of individual securities also showed unusually extreme price movements.
Investigations linked the event to interactions among automated trading systems, high-frequency trading, and a large sell order in E-mini S&P 500 futures. The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission later described how selling pressure moved between futures and cash markets. The event was not the same as a conventional multiday bear market.
The term “flash crash” describes the speed and temporary character of the collapse. It is sometimes confused with the 1987 Black Monday crash, which was much larger as a closing-to-closing percentage decline and unfolded in a different market environment.