The Chronicles of Major Market Reversals - 6 Case Studies Unfolded

3. The Flash Crash (2010)

On May 6, 2010, the U.S. stock market experienced a rapid and dramatic drop, with the Dow Jones Industrial Average plunging nearly 1,000 points within minutes. This "Flash Crash" was caused by high-frequency trading algorithms and highlighted the fragility of our increasingly automated financial markets. While the market quickly bounced back, the Flash Crash serves as a warning about the risks posed by algorithmic trading and the importance of having strong market protections in place.