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Key Takeaways
- Market-wide circuit breakers use the S&P 500’s decline from its previous trading-day close.
- The three thresholds are 7%, 13% and 20%.
- Level 1 and Level 2 operate through the 3:25 p.m. ET cutoff on a standard day, with a 12:25 p.m. ET cutoff for an early scheduled close.
- Levels 1 and 2 each trigger once per day and lead to a minimum 15-minute halt and exchange reopening process.
- Level 3 halts trading for the remainder of the trading day.
What is a market-wide circuit breaker?
A market-wide circuit breaker is a coordinated, broad U.S. trading halt that starts when the S&P 500 falls a set percentage from its previous trading-day close. The thresholds are 7% for Level 1, 13% for Level 2 and 20% for Level 3. Levels 1 and 2 pause trading, and Level 3 stops it for the rest of the day.
How are market-wide circuit breaker levels calculated?
Each trigger value equals the prior S&P 500 close multiplied by one minus the level’s percentage. After a 5,000 close, the three values are 4,650, 4,350 and 4,000. Each calculation starts from 5,000. A reopening does not reset that reference.
Formula
Circuit-breaker trigger value = prior S&P 500 close × (1 − trigger percentage)- Trigger percentages are 7% for Level 1, 13% for Level 2, and 20% for Level 3.
- The thresholds measure a decline during one trading day, not a rolling multi-day drawdown.
Worked Example
The S&P 500 Index closed the prior trading day at 5,000.00, so the exchange calculates that day’s three circuit-breaker trigger values from that reference.
- Level 1: 5,000 × (1 − 0.07) = 4,650
- Level 2: 5,000 × (1 − 0.13) = 4,350
- Level 3: 5,000 × (1 − 0.20) = 4,000
- Level 1 breach at 1:40 p.m.: minimum 15-minute market-wide halt
At 1:40 p.m. ET, a decline to 4,650 triggers Level 1 and a minimum 15-minute halt. The original 5,000 close remains the reference: Level 2 is 4,350 and Level 3 is 4,000. Level 1 triggers only once that day.
How long a market-wide circuit breaker halt lasts
Levels 1 and 2 operate through the 3:25 p.m. ET cutoff on a standard trading day. For an early scheduled close, the cutoff is 12:25 p.m. ET. Each level triggers once per trading day.
A Level 1 or Level 2 halt lasts at least 15 minutes before the exchange reopening process. Level 3 applies throughout the trading day and stops trading for its remainder.
How trading reopens after a market-wide halt
The primary listing exchange conducts each security’s reopening process. Auction price, paired quantity, imbalance and exchange status describe the transition back to trading. Individual securities reopen through their respective processes.
NYSE Group’s procedure uses the last consolidated sale as the official closing price after a Level 3 halt. Its equity and options markets coordinate their responses, with option series reopening after the required underlying-market quote and trade.
Follow the official S&P 500 level and exchange status, then reconcile open orders through the broker’s acknowledgments. After a Level 1 reopening, continue tracking the original Level 2 and Level 3 values.
Market-wide circuit breaker vs LULD
LULD is the separate single-stock mechanism. It applies price bands and pause conditions to individual NMS stocks, while market-wide circuit breakers respond to the broad S&P 500 decline.
Limitations of market-wide circuit breakers
- Track the S&P 500 for the trigger. A sharp drop in a sector, another index or a single stock does not start a market-wide halt.
- Measure the decline from the prior close. The thresholds measure a decline during one trading day, not a rolling multi-day drawdown.
- Track the clock as well as the level. Levels 1 and 2 trigger once per day and only through the 3:25 p.m. ET cutoff, or 12:25 p.m. ET on an early close. After that, a 7% or 13% decline does not halt trading, and Level 3 is the remaining trigger.
- A Level 1 or Level 2 halt pauses trading without setting prices. Each security reopens through its exchange’s process, so price orders for the reopening print, wherever it clears, rather than the last price before the halt.
Bottom line
Market-wide circuit breakers halt broad U.S. trading when the S&P 500 falls 7% or 13% before the afternoon cutoff, and stop it for the day at 20%. Calculate all three trigger values from the prior close, and keep tracking them through any reopening, because the reference does not reset during the day.
Clear answers
Frequently Asked Questions
Sources and Further Reading
- NYSE: Market-Wide Circuit Breakers FAQ, February 2026
- NYSE: Market-Wide Circuit Breaker Trigger Points
How entries are sourced, calculated and updated: editorial methodology.