A circuit breaker was the emergency trading mechanism that halted U.S. stock trading after sharp falls during the 2020 COVID-19 crash.
U.S. exchanges use market-wide circuit breakers to pause trading when the S&P 500 falls by specified percentages from the previous close. The system is designed to give investors time to absorb information and reduce disorderly, panic-driven selling.
During the March 2020 market turmoil, Level 1 circuit breakers were triggered on March 9, March 12, March 16, and March 18. Each halt followed a decline of at least 7% in the S&P 500 before the trading session reached its scheduled end.
Circuit breakers do not prevent losses or guarantee a recovery. They temporarily interrupt trading under defined conditions. The 2020 halts reflected a sudden combination of pandemic uncertainty, economic shutdowns, oil-market tensions, and rapid reassessment of corporate earnings.