The 2010 trading event that caused a sudden plunge and rebound in major U.S. stock indexes was the Flash Crash.
On May 6, 2010, U.S. markets experienced an exceptionally rapid decline followed by a partial recovery. The Dow Jones Industrial Average fell about 1,000 points, or roughly 9%, within minutes. Many individual stocks and exchange-traded products also displayed extreme, short-lived price movements.
Investigations found that automated trading and stressed market liquidity played important roles. A large sell order linked to trader Navinder Singh Sarao contributed to the episode, but the event reflected interactions among algorithms, market makers, and trading venues rather than a single ordinary news announcement.
The Flash Crash differed from a conventional bear market because its most dramatic movements occurred within minutes and many prices later recovered. Regulators subsequently strengthened safeguards, including circuit breakers and controls intended to slow disorderly trading.