The 2010 market event that caused a sudden, trillion-dollar U.S. equity sell-off within minutes was the Flash Crash.
On May 6, 2010, U.S. stock indexes dropped rapidly and then recovered much of the loss. The Dow Jones Industrial Average fell about 1,000 points, or nearly 9 percent, during the session. Individual securities experienced extreme and temporary price movements, including trades at implausibly low or high levels.
Investigations found that automated trading played a central role. A large sell order in E-mini S&P 500 futures interacted with high-frequency trading and other algorithmic activity, amplifying the decline and reducing market liquidity. U.S. regulators later charged trader Navinder Singh Sarao with contributing to the event through spoofing-related conduct; the broader episode involved complex market dynamics rather than one simple cause.
The Flash Crash differed from a conventional bear market: it unfolded within minutes and partly reversed the same day. It led to changes such as circuit breakers and improved procedures for reviewing clearly erroneous trades.