How Stocks Nearly Triggered a Market-Wide Trading Freeze Thursday
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The S&P 500 fell as much as 3.8% on Thursday as chip stocks crashed. Another 3.3% drop would have flipped a switch that freezes every US stock at once. That switch is a circuit breaker, and it locks every buyer and seller out of US stocks for 15 minutes. What Is a Circuit Breaker, and How Close Did Stocks Get? Circuit breakers are automatic, market-wide trading pauses. US exchanges created them after the October 1987 crash, an SEC filing shows. The triggers reset daily from the S&P 500’s last close, 7,688.62 on Wednesday. A 7% fall, to 7,150.41, stops trading for 15 minutes. A 13% fall, to 6,689.09, stops it again. A 20% fall, to 6,150.89, ends the day. The first two pauses only work before 3:25 p.m.
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