The brief 2010 U.S. market plunge that erased nearly 1,000 Dow points was the Flash Crash.
It occurred on May 6, 2010, when major U.S. equity indexes dropped rapidly and then recovered much of the loss within minutes. The Dow Jones Industrial Average fell about 1,000 points, or roughly 9%, before rebounding. Some individual securities briefly traded at extremely low prices.
Investigations found that automated trading and market conditions played major roles. A large sell order in E-mini S&P 500 futures interacted with high-frequency trading and reduced liquidity, causing prices to move unusually fast. Regulators later charged trader Navinder Singh Sarao with contributing to the event through spoofing, though the episode involved broader market mechanisms.
The crash demonstrated that electronic markets could experience severe instability without a traditional economic shock. Exchanges and regulators subsequently introduced safeguards, including circuit breakers and controls for clearly erroneous trades.