Traders are hard at work on the bustling floor of the New York Stock Exchange in New York City, as seen on April 4, 2025.
Whenever stock prices and futures take a nosedive during a single trading session, exchanges step in to halt trading temporarily. This pause is designed to let investors take a breath, hopefully preventing market meltdowns like those from days gone by on Wall Street. These halts are most common during times of intense market upheaval, such as during March 2020 when the COVID-19 pandemic swept global markets off their feet. A similar situation is brewing now, with global trade tensions heating up due to unexpected high tariffs slapped on by President Donald Trump, putting a significant strain on equities as Monday approaches. It’s no surprise that S&P 500 futures have taken a tumble overnight.
‘Limit Down’ Futures
Outside of U.S. trading hours—from 6 p.m. to 9:30 a.m. ET—there’s a rule in place. Should S&P futures dip by 7%, trading comes to a halt until buyers step in around the "limit down" level. A similar scenario unfolded with Russell 2000 futures, a tracker for small-cap stocks, which momentarily hit that 7% drop before bouncing back.
NYSE Circuit Breakers
From 9:30 a.m. to 4 p.m. ET, equity trading can be paused market-wide if the S&P 500 plunges enough to trigger what’s known as a "circuit breaker." If this benchmark sees a certain degree of drop during the day, the New York Stock Exchange enforces a temporary pause on trading. This practice is standard across major stock exchanges.
There are three levels of circuit breakers:
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Level 1: A 7% drop in the S&P 500 stops trading for 15 minutes if it happens before 3:25 p.m. ET. After that time, trading only halts if a Level 3 breaker kicks in.
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Level 2: A 13% fall leads to a 15-minute stoppage if it occurs prior to 3:25 p.m. ET. Post that, trading persists unless a Level 3 is triggered.
- Level 3: A 20% plummet means all trading halts for the rest of the day.
As of the last session, the S&P 500 wrapped up Friday at 5,074.08. Here’s where it needs to land within Monday’s session to spark the different circuit levels:
- Level 1: 4,718.89
- Level 2: 4,414.45
- Level 3: 4,059.26
Wall Street just emerged from a particularly rough Friday, where the S&P 500 slid almost 6%—its worst performance since March 16, 2020, when it fell 11.98%. The Dow Jones Industrial Average wasn’t spared either, diving 6.9%, marking its largest single-day drop since June 11, 2020. Simultaneously, the Nasdaq Composite took a 5.8% hit and entered a bear market, over 20% off its peak reached in December.
Currently, the S&P 500 sits 17% below its record high from February.
