The May 6, 2010 market plunge caused by rapid automated selling was called the Flash Crash.
During the afternoon of May 6, U.S. equity markets experienced an exceptionally rapid fall and partial recovery. The Dow Jones Industrial Average dropped about 1,000 points, or roughly 9%, within minutes before recovering much of the loss. Many individual securities briefly traded at extremely unusual prices.
Investigations linked the event to interactions among high-frequency trading, electronic order systems, market liquidity, and a large automated sell order. The episode showed how quickly modern markets could move when algorithms and human traders responded to one another.
The Flash Crash was not the same as a prolonged bear market such as the 2008 financial crisis. It was primarily a short-lived intraday breakdown, followed by regulatory reviews and changes to market safeguards, including circuit-breaker mechanisms.