Circuit breakers adopted
A year to the month after the crash, the SEC and NYSE jointly implemented market-wide trading halts: a 7% intraday fall triggers a 15-minute pause; a 20% fall closes markets for the day. The design has been modified several times since but the principle still governs US equities.
Circuit breakers have been triggered only a handful of times since 1988, most dramatically during the COVID crash of March 2020 (four halts in one week). They work as intended: they buy the Fed time to respond, and they prevent the kind of algorithmic death spiral that gave 1987 its name.
05 · Black Monday
On October 19, 1987, the Dow fell 22.6% in a single session. It remains the largest one-day percentage decline in the history of the US stock market. Unlike 1929, there was no obvious economic cause. The consensus explanation is a feedback loop between portfolio insurance and program trading — algorithms selling because prices fell, then prices falling because algorithms sold.
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