The rapid U.S. market plunge on May 6, 2010, was known as the Flash Crash.
In minutes, major U.S. equity indexes dropped sharply before recovering much of the decline. The Dow Jones Industrial Average briefly fell nearly 1,000 points, its largest intraday point decline at that time. Some individual securities traded at bizarre prices, including shares that briefly appeared to be worth only a few cents or even fractions of a cent.
Investigations by U.S. regulators concluded that a large automated sell order, combined with high-frequency trading and stressed market conditions, helped produce a feedback loop. Trading systems reacted to falling prices, and the resulting activity intensified the move. The event exposed weaknesses in fragmented electronic markets and in how algorithms handled extraordinary volatility.
The Flash Crash was not the same as a conventional, multiday bear market. It was unusually fast and was followed by substantial recovery. Regulators later introduced or strengthened measures such as single-stock circuit breakers and broader market-wide trading pauses.