The 2010 event that caused a temporary trillion-dollar loss in U.S. stock market value within minutes was the Flash Crash.
On May 6, 2010, U.S. equity indexes plunged rapidly and then recovered much of the decline before the trading session ended. The Dow Jones Industrial Average briefly fell nearly 1,000 points, while prices in individual shares and exchange-traded funds became extremely dislocated.
Investigations found that automated trading and a large sell order in E-mini S&P 500 futures interacted with stressed market conditions and limited liquidity. The precise chain was complex, involving high-frequency trading, order-book imbalances, and rapid cancellations. Authorities later charged trader Navinder Singh Sarao in connection with spoofing activity; he pleaded guilty in 2016.
The Flash Crash differed from a traditional prolonged bear market because its most dramatic movements happened within minutes. It prompted new safeguards, including trading pauses and coordinated procedures for handling extreme price movements.