The 2010 U.S. market plunge that erased nearly 1,000 Dow points within minutes was nicknamed the Flash Crash.
On May 6, 2010, major U.S. indexes dropped rapidly during afternoon trading. The Dow Jones Industrial Average fell about 1,000 points, or roughly 9%, before recovering much of the loss. Many individual securities experienced extreme, short-lived price movements, including trades at implausibly low or high levels.
Investigations linked the event to interactions among high-frequency trading, automated orders, market liquidity, and a large sell order in E-mini S&P 500 futures. In 2015, U.S. authorities charged trader Navinder Singh Sarao with using spoofing and layering strategies that contributed to the conditions, though the broader event involved complex market mechanics.
The Flash Crash differs from a traditional prolonged bear market. Its defining feature was speed: prices collapsed and partially rebounded within minutes. It prompted changes to market safeguards, including circuit breakers and clearer rules for reviewing clearly erroneous trades.