Black Monday, the 1987 market crash, led the United States to introduce stock-market circuit breakers.
After the Dow plunged 22.6% on October 19, 1987, regulators examined how trading systems had amplified the decline. The President’s Working Group on Financial Markets recommended coordinated safeguards, and the New York Stock Exchange introduced circuit breakers in 1988. These mechanisms were designed to pause trading after exceptionally large index declines.
Circuit breakers are not a guarantee against losses. Their purpose is to create time for information to spread, orders to be reviewed, and market participants to reassess prices. The rules have changed over time, including after later episodes such as the 2010 Flash Crash.
Black Monday is sometimes confused with the 1929 Black Tuesday crash because both names use a weekday and a color. They were separate events: Black Monday occurred in 1987, while Black Tuesday occurred in 1929. The 1987 episode is especially associated with modern market-wide trading halts.