The 2010 market event in which U.S. stocks plunged and quickly rebounded was the Flash Crash.
It occurred on May 6, 2010, during a period of market uncertainty surrounding the European sovereign-debt crisis. The Dow Jones Industrial Average dropped nearly 1,000 points, or about 9%, within minutes before recovering much of the loss.
Investigations found that automated trading played a major role. A large sell order in E-mini S&P 500 futures interacted with high-frequency trading and rapidly reduced market liquidity. Individual stocks and exchange-traded funds experienced extraordinary temporary price movements.
The event led U.S. regulators and exchanges to introduce stronger circuit breakers and controls. The U.S. Department of Justice later charged trader Navinder Singh Sarao, who pleaded guilty to spoofing-related offenses; authorities did not describe his activity as the sole cause of the entire event.