The computer-trading event that caused a brief, dramatic U.S. market plunge on May 6, 2010, was the Flash Crash.
During the 2010 Flash Crash, U.S. equity indexes fell rapidly and then recovered much of the loss within minutes. The Dow Jones Industrial Average briefly dropped almost 1,000 points, its largest intraday point decline at that time. Some individual securities traded at extraordinarily low or high prices before normal market conditions returned.
Investigations found that automated trading and market-structure conditions played central roles. A large automated sell order in E-mini S&P 500 futures helped interact with existing high-frequency trading and liquidity conditions, although the event involved multiple contributing factors.
The crash led regulators and exchanges to introduce or strengthen safeguards, including circuit breakers and rules for clearly erroneous trades. It was short-lived, unlike a prolonged bear market.