The first U.S. market-wide circuit-breaker threshold triggered during the 2020 stock-market crash was 7%.
On March 9, 2020, the S&P 500 fell 7% from its previous closing level shortly after trading began. That activated a Level 1 circuit breaker and halted trading on U.S. exchanges for 15 minutes. The pause was intended to give investors time to assess rapidly changing information rather than sell continuously in a panic.
The plunge followed growing fears about the economic effects of COVID-19 and a collapse in oil prices after a dispute between Saudi Arabia and Russia. The S&P 500 triggered the same first-level halt again on March 12 and March 16, 2020.
The rule is sometimes described as a Dow circuit breaker, but the market-wide thresholds are based on percentage moves in the S&P 500. A 13% decline triggers a second halt, while a 20% fall stops trading for the remainder of the session.