Today, the stock market faces the possibility of halting all trading, a scenario that hasn't occurred since the onset of the pandemic. This potential halt is triggered by what is known as a circuit breaker, a mechanism designed to prevent panic selling or buying.
The New York Stock Exchange utilizes a circuit breaker tied to the S&P 500 index to automatically pause trading in times of extreme market volatility. This system was implemented following the events of Black Monday in 1987, when the Dow Jones Industrial Average plummeted by over 22% in a single day.
