The 2010 U.S. market plunge that briefly erased nearly $1 trillion was the Flash Crash.
On May 6, 2010, major U.S. stock indexes fell sharply within minutes before recovering much of the decline. The Dow Jones Industrial Average dropped about 1,000 points, nearly 9 percent, during the session. The event briefly erased approximately $1 trillion in market value before prices rebounded.
Investigations linked the episode to a combination of high-frequency trading, automated selling, thin liquidity, 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 concluded that the interaction of automated systems amplified the move.
The Flash Crash was not a conventional, multi-month bear market like the crashes of 1929 or 1987. It exposed how electronic markets could move extremely quickly and produce disorderly prices. Regulators subsequently strengthened market-wide circuit breakers and adopted mechanisms designed to pause trading in individual securities during extreme moves.