The 2010 U.S. market event in which stocks briefly plunged before recovering was the Flash Crash.
On May 6, 2010, major U.S. indexes fell rapidly in a matter of minutes before recovering much of the decline. The Dow Jones Industrial Average temporarily lost almost 1,000 points, then rebounded. Individual securities experienced extreme price movements, including trades at implausibly low or high prices.
Investigations found that automated trading played a central role. A large sell order in E-mini S&P 500 futures interacted with high-frequency trading and market conditions, producing a feedback loop of rapid buying and selling. The event exposed weaknesses in fragmented electronic markets and inconsistent safeguards.
The Flash Crash was not a conventional economic collapse like the 2008 crisis. It was a short-lived market disruption, although it led to new rules such as trading pauses and better coordination among exchanges. In 2015, U.S. authorities charged Navinder Singh Sarao with contributing to the event through spoofing.