Which U.S. stock-market rule automatically halted trading during the first circuit-breaker event of March 2020?
Answer
Level 1 circuit breaker
The Level 1 circuit breaker automatically halted U.S. stock trading during the first circuit-breaker event of March 2020.
On March 9, 2020, trading on the New York Stock Exchange was halted after the S&P 500 fell 7 percent from its previous close. That threshold activated the market’s Level 1 circuit breaker, producing a 15-minute pause during the regular session.
The halt occurred amid rapidly worsening fears about COVID-19, an oil-price dispute between Saudi Arabia and Russia, and the economic effects of travel and business restrictions. Additional circuit-breaker halts followed on March 12, March 16, and March 18 as markets continued to fall.
The three U.S. market-wide levels are based on declines in the S&P 500. Level 1 is a 7 percent fall, Level 2 is a 13 percent fall, and Level 3 is a 20 percent fall. A Level 3 decline ends regular-session trading for the day.