U.S. stock exchanges first used circuit breakers during the 2020 crash on March 9, 2020.
The S&P 500 fell more than 7% shortly after trading began, triggering a Level 1 market-wide circuit breaker. Trading paused for 15 minutes, a mechanism designed to give investors time to absorb information and reduce disorderly selling.
The March 9 fall was driven by escalating COVID-19 fears and a collapse in oil prices after a breakdown in cooperation between major oil producers. Circuit breakers were triggered again on March 12, March 16, and March 18 as the crisis intensified.
The circuit-breaker system was introduced after the 1987 crash and later revised. It is different from ordinary stock-specific trading halts: a market-wide breaker applies when a benchmark index falls by a specified percentage from its previous close.