Which 2010 event caused a sudden but temporary plunge in U.S. equity markets?

The 2010 event that caused a sudden but temporary plunge in U.S. equity markets was the 2010 Flash Crash.

On May 6, 2010, major U.S. stock indexes dropped rapidly and then recovered much of the loss within minutes. The Dow Jones Industrial Average briefly fell nearly 1,000 points, about 9 percent, before rebounding. Individual securities experienced extraordinary temporary price movements.

Investigations concluded that automated trading, market structure, and a large sell order interacted in destabilizing ways. The U.S. Securities and Exchange Commission and Commodity Futures Trading Commission reported that a trader, Navinder Singh Sarao, used spoofing-related activity, although the event also depended on broader market conditions and automated responses.

The crash led to reforms including market-wide circuit breakers and rules intended to prevent disruptive spoofing. It was not a conventional bear market: the defining feature was speed and partial recovery, rather than a sustained collapse over months or years.