Market Turmoil Triggers Trading Halts Amid Steep Sell-Off

Stock markets faced intense pressure as global trade tensions and steep tariffs imposed by President Trump led to a sharp downturn in equities. S&P 500 futures plunged overnight, triggering “limit down” rules that pause trading outside U.S. market hours when futures fall 7%.

This mechanism, used between 6 p.m. and 9:30 a.m. ET, is designed to slow panic selling until buyers emerge. The Russell 2000 futures, tracking smaller stocks, also hit this threshold before partially recovering.

During regular market hours (9:30 a.m. to 4 p.m. ET), the New York Stock Exchange employs circuit breakers to prevent freefalling markets. These halts are triggered by intraday drops in the S&P 500:

• Level 1: A 7% decline halts trading for 15 minutes (before 3:25 p.m. ET).
• Level 2: A 13% drop also triggers a 15-minute pause (before 3:25 p.m.).
• Level 3: A 20% fall shuts down trading for the rest of the day.

On Friday, the S&P 500 fell nearly 6% — its worst day since March 2020. The Dow sank 6.9%, and the Nasdaq entered bear market territory, down over 20% from its peak. The S&P 500 closed at 5,074.08, meaning Monday’s circuit breaker thresholds are:

• Level 1: 4,718.89
• Level 2: 4,414.45
• Level 3: 4,059.26

As markets remain volatile, these safeguards aim to maintain stability and avoid panic-driven crashes like those seen in past crises.