The sudden May 6, 2010 market plunge that quickly reversed was called the Flash Crash.
On May 6, 2010, major United States stock indexes fell sharply within minutes before recovering much of the decline. The Dow Jones Industrial Average briefly lost nearly 1,000 points, then rebounded. Some individual securities traded at extremely low prices, while others were executed at unusually high prices.
Investigations found that automated trading, market structure, and a large sell order in E-mini S&P 500 futures interacted in a way that intensified the decline. Regulators did not describe the event as the result of one simple cause. Later reforms included single-stock circuit breakers and rules for handling clearly erroneous trades.
The Flash Crash differs from a conventional bear market or long recession-driven collapse because its most dramatic movement unfolded in minutes. The event nevertheless became a major case study in electronic trading, liquidity, and the risks of feedback between computer systems.