Circuit breakers were the emergency trading safeguards that halted New York Stock Exchange trading during the 2020 stock-market crash.
U.S. stock exchanges triggered market-wide circuit breakers several times in March 2020 as the COVID-19 pandemic produced extreme uncertainty and rapid selling. The first Level 1 halt occurred on March 9, after the S&P 500 fell 7% from its previous close. Similar halts followed on March 12, March 16, and March 18.
These rules pause trading when a broad market index falls by specified percentages. A Level 1 halt pauses trading for 15 minutes when the decline reaches 7% before 3:25 p.m. Eastern Time. A Level 2 halt uses a 13% decline, while a 20% fall triggers a Level 3 halt for the rest of the session.
Circuit breakers are designed to give investors time to absorb information and reduce panic-driven order imbalances. They do not prevent losses or guarantee a market rebound. Individual stocks can also have separate volatility pauses, which are different from market-wide circuit breakers.