Are Circuit Breakers for the S&P Triggered Multiple Times in a Day?

Stock markets have mechanisms to prevent extreme volatility from spiraling out of control. One such safeguard is the circuit breaker system, which temporarily halts trading when prices drop too sharply within a single session. These pauses give investors time to assess the situation and prevent panic-driven sell-offs from worsening.

Market-Wide Threshold Levels

The U.S. equities circuit breaker system is structured around three percentage-based thresholds tied to the S&P 500’s daily movement. These thresholds are recalibrated quarterly based on the index’s average closing value from the prior month to ensure they reflect current market conditions.

A 7% drop in the S&P 500 triggers a 15-minute trading halt if it occurs before 3:25 p.m. Eastern Time. If losses deepen to 13%, another 15-minute pause follows under the same time restriction. These halts slow momentum and allow market participants to reassess positions.

A 20% decline results in a complete market shutdown for the rest of the day, regardless of timing. This measure is designed to prevent a full-scale collapse by stopping trading entirely when losses become extreme.

Sequential Triggers in One Session

The first circuit breaker signals heightened uncertainty, often leading to further selling when trading resumes. If investor sentiment remains negative, the second threshold may be reached, prompting another halt. These consecutive pauses can create a cascading effect, where each resumption leads to renewed volatility.

Market liquidity influences whether multiple halts occur in a session. High trading volume can stabilize prices as institutional investors step in, while low liquidity can amplify price swings, making additional thresholds more likely to trigger. Algorithmic trading also plays a role, as automated systems can accelerate sell-offs when programmed risk limits are breached.

Historical examples illustrate how these triggers unfold. On March 9, 2020, the S&P 500 fell sharply at market open, triggering the first circuit breaker within minutes. As uncertainty surrounding the COVID-19 pandemic intensified, the index continued to decline, leading to another halt on March 12. These back-to-back disruptions showed how external shocks can drive multiple circuit breaker activations in a short period.

Resumption Procedures

Once a trading halt ends, exchanges follow a structured reopening process to ensure an orderly return. During the pause, designated market makers and liquidity providers assess order imbalances and adjust bids and offers to stabilize prices. An unbalanced order book—where sell orders far exceed buy orders—can cause further disruptions if not properly managed.

Auction mechanisms play a central role in reopening. When a halt is lifted, exchanges conduct a reopening auction, matching buy and sell orders at a single equilibrium price. This helps prevent excessive volatility by ensuring trading resumes at a level reflecting actual market sentiment rather than panic-driven orders. The New York Stock Exchange (NYSE) and Nasdaq each have specific protocols for these auctions, with designated market makers overseeing the process.

Investor behavior after a resumption varies. Some traders use the pause to reassess their positions, leading to more measured decisions. Others, particularly algorithmic traders, react instantly, sometimes driving sharp price movements within seconds. The interaction between human decision-making and automated systems influences whether the market stabilizes or experiences another wave of selling.