The S&P 500 triggered a circuit breaker after plunging 7% on March 9, 2020, during the early stages of the 2020 stock-market crash. Trading was halted for 15 minutes under the market’s Level 1 limit.
The decline reflected growing concern about the economic effects of COVID-19 and a sharp dispute in the oil market between Saudi Arabia and Russia. U.S. stocks had already fallen substantially from their February records.
The circuit-breaker system was designed to slow panic selling and give investors time to process information. Under the rules then in force, a 7% fall in the S&P 500 before 3:25 p.m. Eastern Time triggered a temporary halt. Similar halts occurred later in March.
The 2020 crash was unusually rapid. Massive fiscal support, central-bank measures, and changing expectations about the pandemic helped markets rebound, although economic damage and volatility continued.