The 2010 U.S. market event in which the Dow fell about 1,000 points within minutes was called the Flash Crash.
On May 6, 2010, major U.S. equity indexes suddenly dropped and then recovered much of the loss in a short period. The Dow Jones Industrial Average fell about 1,000 points, approximately 9 percent, before rebounding. Individual securities experienced unusually extreme price movements during the episode.
Investigations found that high-frequency trading, automated execution, liquidity withdrawal, and a large sell order interacted in destabilizing ways. U.S. authorities later charged trader Navinder Singh Sarao with contributing to the event through spoofing-related activity, though the crash resulted from a broader market mechanism rather than one simple cause.
The Flash Crash differs from traditional crashes that unfold over days or months. It highlighted how electronic markets can move rapidly when algorithms respond to one another and available liquidity disappears. Regulators subsequently introduced safeguards, including circuit breakers and rules addressing extraordinary volatility.