The Flash Crash was the May 6, 2010 U.S. market event that briefly erased nearly $1 trillion in stock value.
During the afternoon of May 6, major U.S. indexes plunged rapidly before recovering much of the loss within minutes. The Dow Jones Industrial Average fell about 1,000 points, or roughly 9 percent, at the session’s low. Some individual securities traded at implausible prices before normal quotations returned.
Investigations found that automated trading, extreme market stress, and a large sell order were central to the episode. The U.S. Securities and Exchange Commission and Commodity Futures Trading Commission later described how algorithmic activity and shrinking liquidity amplified the decline.
The Flash Crash differed from a conventional bear market because its defining feature was speed: the most dramatic movement happened within minutes. Regulators subsequently introduced safeguards including circuit breakers and trading pauses for unusually volatile conditions.