Stock Market Circuit Breakers Explained: The 7%, 13% and 20% Levels, Every Halt Since 1988, and Every 7% Down Day for the S&P 500 Since 1950

A circuit breaker is a rule that pauses trading for a fixed time once prices fall a fixed amount. US stocks have two of them. The market-wide version watches the S&P 500 and can pause every stock on every exchange at 7%, 13% and 20% below the previous close. The single-stock version, called Limit Up-Limit Down, pauses one stock for five minutes when its price runs through a band around its own recent average. Both date from the aftermath of October 19, 1987, when the S&P 500 lost 20.5% in one session.

This page gives the exact levels and times, the single-stock bands, each occasion the market-wide breaker has actually fired, and a table of every day since 1950 on which the S&P 500 closed 7% or more below the prior close, with what the index did over the next day, month and year. The data comes from Yahoo Finance daily closes for the S&P 500, January 1950 through October 30, 2026, which is 19,330 sessions. The rules were checked on October 31, 2026 against the NYSE trading information page, the SEC investor bulletin and the official LULD plan site.

The three market-wide levels

The market-wide breaker is NYSE Rule 7.12, mirrored at every other US exchange. It measures a one-day decline in the S&P 500 against the prior day's close, so the point levels change every morning while the percentages stay fixed.

• Level 1, down 7%: before 3:25 PM Eastern, all US stock trading pauses for 15 minutes. At or after 3:25 PM, no pause.
• Level 2, down 13%: the same 15-minute pause before 3:25 PM, none at or after.
• Level 3, down 20%: trading stops for the rest of the day at any time.

Levels 1 and 2 can each fire once per day. After a Level 1 pause and reopen, the index has to reach the 13% line before trading pauses again. The 3:25 PM cutoff is there so a late slide cannot stop the market from printing a closing price; Level 3 is the one exception.

A worked example with a prior close of 6,000: Level 1 sits at 5,580, Level 2 at 5,220, Level 3 at 4,800. If the index touches 5,580 at 10:02 AM, every stock stops at 10:02 and reopens at 10:17 through each exchange's reopening auction.

These rules have applied since February 4, 2013. From 1988 until then the breaker followed the Dow Jones Industrial Average, first as fixed point drops and from 1998 as 10%, 20% and 30% declines. The 2013 rewrite moved the reference to the S&P 500 and lowered the first level, because the old 10% Dow level had never fired in its percentage form.

Single stocks: the Limit Up-Limit Down bands

The market-wide breaker almost never fires. What traders meet in practice is the single-stock mechanism, Limit Up-Limit Down, in force for every US-listed stock and exchange-traded product since October 2013. It keeps trades inside a band around a reference price, the average trade price over the preceding five minutes, from 9:30 AM to 4:00 PM Eastern.

• Tier 1 (S&P 500 and Russell 1000 stocks plus selected exchange-traded products) priced above $3: 5% either side of the reference price.
• Tier 2 (every other listed security) priced above $3: 10%.
• Any stock from $0.75 to $3: 20%. Below $0.75: the smaller of $0.15 or 75%.
• The last 25 minutes (3:35 to 4:00 PM): Tier 1 bands and all bands under $3 double, so 5% becomes 10%.

When the national best bid or offer reaches a band and stays there, the stock enters a Limit State. If those orders are not filled or cancelled within 15 seconds, the listing exchange declares a five-minute Trading Pause, which can be extended once by another five minutes. A pause that starts inside the last 10 minutes of the session does not reopen; the exchange goes straight to its closing auction.

This is the halt you see on an earnings reaction or a thin small cap. A $2 stock can move 20% in a few minutes and pause. An S&P 500 stock pauses only after a 5% move away from its five-minute average, rare on a normal day and routine in a crash.

Every time the market-wide breaker has fired

Since the rule was written in 1988 the market-wide breaker has stopped US stock trading on five occasions, all of them on four calendar days in two episodes.

• October 27, 1997, about 2:35 PM: the Dow fell 350 points, the first trigger under the original point-based rule, and trading stopped for 30 minutes. It reopened, reached the 550-point line at 3:30 PM, and the market closed for the day. The Dow ended down 7.2%. Regulators later judged the first pause premature, since 350 points was only about 4.5% of the index, and the levels were rebuilt as percentages the next year.
• March 9, 2020, 9:34 AM: the S&P 500 reached the 7% line four minutes after the open and paused for 15 minutes, the first market-wide pause since 1997 and the first under the S&P-based rule. The index closed down 7.6%.
• March 12, 2020: Level 1 again in the opening minutes. The index closed down 9.5%.
• March 16, 2020: Level 1 at the open for the third time in a week. The index closed down 12.0%, its worst day since 1987, and still never reached the 13% line while trading.
• March 18, 2020, about 1 PM: Level 1 in the afternoon. The index recovered part of the drop and closed down 5.2%, which is why this halt does not appear in any table built from closing prices.

Nothing since. The April 2025 tariff selloff came closest on a closing basis: the S&P 500 finished April 4, 2025 down 6.0%, a full point short of Level 1.

Every day the S&P 500 closed down 7% or more since 1950

Nine sessions in 19,330 qualify, and they cluster: two in October 1987, four in the autumn of 2008 and three in March 2020. The breaker measures the index while trading, so this close-to-close list is a floor, not the trigger log; the March 18, 2020 pause is the proof. Each row shows the close-to-close drop and the index's move over the next trading day, five days, 21 days (about a month) and 252 days (about a year).

• 1987-10-19: -20.5%. Next day +5.3%, one week +1.3%, one month +8.1%, one year +22.9%.
• 1987-10-26: -8.3%. Next day +2.4%, one week +12.3%, one month +8.2%, one year +24.0%.
• 2008-09-29: -8.8%. Next day +5.4%, one week -4.5%, one month -15.0%, one year -4.1%.
• 2008-10-09: -7.6%. Next day -1.2%, one week +4.0%, one month +2.3%, one year +17.8%.
• 2008-10-15: -9.0%. Next day +4.2%, one week -1.2%, one month +0.4%, one year +20.8%.
• 2008-12-01: -8.9%. Next day +4.0%, one week +11.4%, one month +10.7%, one year +35.9%.
• 2020-03-09: -7.6%. Next day +4.9%, one week -13.1%, one month -3.2%, one year +41.1%.
• 2020-03-12: -9.5%. Next day +9.3%, one week -2.9%, one month +11.3%, one year +59.0%.
• 2020-03-16: -12.0%. Next day +6.0%, one week -6.2%, one month +16.6%, one year +66.1%.

Across the nine: the next session was up eight times, median +4.9%. The next week was up only four times, median -1.2%. One month later the index was higher seven times, median +8.1%, and one year later higher eight times, median +24.0%. The exception each time is the 2008 cluster, where the first 7% day on September 29 was followed by a further 15% loss over the next month.

Nine observations is a small sample and three clusters are really three events. The pattern that does hold is mechanical: a 7% day has only ever happened inside a selloff that was already under way, never as the first bad day.

The near misses: 5% to 7% days

Widening the net to every close-to-close drop of 5% or more adds 21 sessions for 30 in total. Thirteen of the 30 fell in the 2000s, almost all in late 2008; six in the 2020s, including April 4, 2025; five in the 1980s; two each in the 1950s and 1990s; one in the 1960s; and one in the 2010s, August 8, 2011. For the 21 days between 5% and 7%, the index was higher a month later 14 times with a median gain of 2.3%.

Set against the whole record, a 5% day arrives about once every 640 sessions and a 7% day about once every 2,150. For how far those days accumulate into full declines, see the drawdown post, which measures every peak-to-trough fall of 10% or more over the same period.

What a halt means if you trade with software

A market-wide pause stops matching on every exchange, so nothing fills for 15 minutes: not a stop order, not a limit order, not a market order. Orders already resting at a broker stay queued and go into the reopening auction, where the first print can be well away from the last trade before the pause. A stop-loss set 3% below the halt price does not stop you out at 3%; it becomes a market order at whatever the reopen prints. The same is true of a single-stock LULD pause, on a smaller scale and for five minutes.

Three practical points follow for anyone running an automated strategy through a broker API.

• Quotes freeze during a pause. A system that reads the last quote and acts on it will act on a stale number. JorgAI's exit path refuses any quote older than five minutes and skips the cycle rather than sell on a frozen print, a rule added after two members were stopped out on 15-minute-old prices in October 2026.
• Stops are not guarantees. A stop order protects against a slow decline, not a gap or a pause. Position size is what bounds the loss on a halt day, not the stop level. The VIX post shows how option prices already carry this gap risk.
• Your own circuit breaker is the one you control. The exchange rule caps a day at 20% for the whole market. A personal daily loss limit caps a day for your account.

JorgAI exposes that last point as a setting, the daily loss brake: once a profile's realized losses for the day reach the dollar amount, automated buying pauses until the next session. New accounts have started with a $100 brake since August 27, 2026, and the setup quiz offers $50, $100, $250 or none. As of October 31, 2026, 12 of the 13 members with live automated trading have a brake set, the median is $100 and the range runs from $20 to $1,000. It has not fired for anyone since August 1, which says more about position sizes than about the brake: most profiles risk well under 1% of the account per trade, so a $100 day would take a run of losers. The setting is described in the settings glossary.

For a calmer walk through what to do on a high-volatility day, the volatility post covers the order of operations.

Quick answers

Is the stock market closed after a circuit breaker?

Only after Level 3, a 20% drop, which closes it for the rest of the day. Level 1 and Level 2 pauses last 15 minutes, and neither applies at or after 3:25 PM Eastern.

Can I place orders during a halt?

Most brokers accept orders during a pause and hold them for the reopening auction. Nothing executes until trading resumes, and the reopening price can differ sharply from the last trade before the pause.

Do circuit breakers apply to futures and crypto?

US stock index futures have their own exchange price limits, set by CME rather than NYSE Rule 7.12, and they operate overnight when stocks are closed. Crypto exchanges have no market-wide halt at all; Bitcoin fell 37% on March 12, 2020 with trading open throughout.

How often does the market-wide breaker fire?

Five times in 38 years, on four days: October 27, 1997 and March 9, 12, 16 and 18, 2020. The single-stock LULD pause, by contrast, happens on most trading days somewhere in the market.

What were the old levels?

From 1988 the Dow-based rule used fixed point drops, 350 and 550 points by 1997. From 1998 it used 10%, 20% and 30% of the Dow. The S&P 500 levels of 7%, 13% and 20% took effect on February 4, 2013.

JorgAI connects to your own brokerage account and trades a rules-based plan inside limits you set, including the daily loss brake described above. You can start with a free account and see every setting before anything trades.