The 2010 trading event that caused the Dow Jones to plunge nearly 1,000 points within minutes was the Flash Crash.
On May 6, 2010, U.S. equity markets experienced a sudden and extremely rapid decline. The Dow Jones Industrial Average fell about 1,000 points, approximately 9%, before recovering much of the loss in a short time. Many individual securities recorded unusually extreme prices.
Regulators concluded that a large automated sell order, combined with high-frequency trading and stressed market conditions, helped create a feedback loop. Algorithms rapidly sold and canceled orders, reducing liquidity and intensifying the fall. The precise mechanics involved several interacting systems rather than one simple human decision.
The Flash Crash differed from a conventional bear market because its most dramatic movement occurred over minutes and was followed by a partial rebound. New safeguards, including circuit breakers and tighter controls on automated trading, were introduced or strengthened afterward.