The sudden May 6, 2010 collapse in U.S. stock indexes was nicknamed the Flash Crash.
On May 6, 2010, major U.S. equity indexes plunged and then recovered much of the loss within minutes. The Dow Jones Industrial Average briefly fell about 1,000 points, or nearly 9%, before rebounding. Some individual securities experienced extraordinarily low or high trade prices.
Investigations linked the event to an interaction between high-frequency trading, market conditions, and a large sell order. A 2014 U.S. Justice Department case concluded that trader Navinder Singh Sarao used spoofing strategies that contributed to the volatility, although the event also exposed broader structural weaknesses.
The crash led regulators and exchanges to introduce or strengthen safeguards, including single-stock circuit breakers and market-wide trading pauses. It was unusual because the market’s most dramatic movement happened within one trading day rather than through a long economic decline.