The market event on 6 May 2010 in which the Dow plunged nearly 1,000 points within minutes was the Flash Crash.
During the afternoon session, major U.S. equity indexes fell rapidly before recovering much of the loss. The Dow Jones Industrial Average temporarily lost about 1,000 points, roughly 9%, in one of the most dramatic intraday moves in modern market history.
Investigations found that automated trading, market liquidity problems, and a large sell order contributed to the episode. Regulators concluded that a trader’s sale of a large number of E-mini S&P 500 futures contracts helped trigger the cascade, while high-frequency trading amplified it.
The Flash Crash was not a conventional economic collapse like 1929 or 2008. It was a short-lived market-structure failure, and it prompted new safeguards such as trading pauses and tighter controls on automated orders.