The sudden U.S. market collapse on May 6, 2010, was called the Flash Crash.
During the afternoon, major U.S. equity indexes fell sharply within minutes before recovering much of the decline. The Dow Jones Industrial Average briefly dropped nearly 1,000 points, then rebounded. Individual securities experienced extremely wide and sometimes irrational price movements.
Investigations found that automated trading played a central role. A large sell order in E-mini S&P 500 futures interacted with high-frequency trading and market conditions, producing a rapid feedback loop of selling and liquidity withdrawal. The exact event involved several technical and market-structure factors rather than one simple cause.
The Flash Crash differed from a conventional bear market because its most dramatic movement happened in a very short period. Regulators subsequently strengthened safeguards, including single-stock trading pauses and market-wide circuit breakers. The episode remains an important example of how electronic trading can amplify temporary instability.