The 2010 U.S. market event in which stocks plunged and rapidly rebounded within minutes was the Flash Crash.
On May 6, 2010, major U.S. stock indexes fell sharply in a matter of minutes before recovering much of the decline. The Dow Jones Industrial Average briefly lost nearly 1,000 points, then rebounded. Some individual securities experienced extremely large temporary price movements, demonstrating how quickly modern electronic markets could become unstable.
Investigations by U.S. regulators concluded that a large automated sell order, combined with existing stress and high-frequency trading activity, helped create a feedback loop of selling and disappearing liquidity. In 2015, trader Navinder Singh Sarao was charged in connection with spoofing activity linked to the event; the market-wide episode involved more than one factor. The Flash Crash was not the same as the 1987 crash or the 2008 financial crisis. It was unusually brief, which is why the term “flash” is central to its name.