Black Monday prompted the New York Stock Exchange and regulators to develop modern circuit breakers.
On October 19, 1987, the Dow Jones Industrial Average plunged 22.6 percent. The unprecedented speed and scale of the decline raised concerns that computerized trading and panic selling could create a self-reinforcing market spiral.
Circuit breakers are temporary trading halts or restrictions triggered by unusually large price movements. Their purpose is to give investors time to absorb information and reduce disorderly selling, rather than guaranteeing that prices will recover.
The United States later established market-wide interruption rules, and the framework has evolved over time. The 2010 Flash Crash further demonstrated why trading controls matter, although it had different immediate causes from the 1987 crash.