Black Monday prompted the creation of circuit breakers on U.S. stock exchanges.
On October 19, 1987, markets fell at exceptional speed, and the Dow Jones Industrial Average lost 22.6 percent. The scale and pace of the decline led regulators and exchanges to examine how trading systems could amplify panic and how temporary pauses might give investors time to assess information.
The resulting circuit breakers, also called trading curbs, were designed to halt or slow trading after specified market declines. Their purpose is to interrupt a disorderly cascade rather than guarantee that prices will recover. The rules have been revised several times as market structure and technology changed.
Circuit breakers are sometimes confused with ordinary trading halts on individual stocks. Black Monday helped inspire broad market-wide safeguards, while single-security halts can respond to company news or unusual activity. The later 2010 Flash Crash renewed debate about automated trading and market controls but did not create the original U.S. system.