The Flash Crash was the 6 May 2010 U.S. market collapse in which the Dow Jones Industrial Average plunged about 1,000 points within minutes. The rapid fall and partial recovery occurred during an otherwise ordinary trading day and became a landmark event in electronic-market history.
Investigations found that automated trading played a major role. A large sell order in stock-index futures interacted with high-frequency trading and other algorithmic systems, causing liquidity to disappear rapidly. As prices moved, automated orders amplified the speed and scale of the decline.
The Dow recovered much of the loss before the session ended, but many individual securities experienced extreme, short-lived price movements. Some trades were later canceled under exchange rules because they were considered clearly erroneous. The episode prompted regulators and exchanges to strengthen safeguards, including market-wide circuit breakers and single-stock trading limits.
The Flash Crash is not the same as the 1987 stock-market crash: 1987 involved a broad, sustained panic, while the 2010 event was exceptionally fast and largely reversed the same day.