The 2010 market event that caused a sudden, severe U.S. equity plunge and recovery within minutes was the Flash Crash. On May 6, 2010, major U.S. indexes dropped rapidly before recovering much of the loss in a short period.
The Dow Jones Industrial Average fell about 1,000 points, almost 9 percent, during the episode. Some individual securities traded at extraordinarily low or high prices before exchanges cancelled many clearly erroneous transactions. Investigations linked the event to interactions among automated trading systems, a large sell order, and worsening liquidity.
The Flash Crash showed how electronic markets could behave differently from traditional floor-based trading. It was not the same as a long-lasting bear market such as the decline after 1929 or the global crisis of 2008. Regulators introduced measures including circuit breakers and improved monitoring to reduce the risk of another disorderly, ultra-fast collapse.