Explained: Why is the stock market down today, April 11 , and will a circuit breaker be installed on the Nasdaq?
The Dow Jones dropped as much as 2,150 points during Thursday’s tumultuous opening hour of the US stock market, while the S&P 500 and the Nasdaq fell between 6.5% and 7%.
The Dow Jones dropped as much as 2,150 points during Thursday’s tumultuous opening hour of the US stock market, while the S&P 500 and the Nasdaq fell between 6.5% and 7%. This follows the release of the consumer price inflation report by the Bureau of Labor Statistics,which showed that March inflation decreased more than anticipated.
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Many investors questioned whether the Nasdaq would be placed on a circuit breaker as nearly all of the big equities fell. When the S&P 500 index drops by a specific percentage in a single trading session, a circuit breaker is activated. Level 1 represents a 7% loss, Level 2 represents a 13% decline, and Level 3 represents a 20% decline. For Levels 1 and 2, trading stops for 15 minutes if the drop happens before 3:25 PM ET, and for the rest of the day if it’s a Level 3 drop at any time.
We are still early in the trading day, which runs from 9:30 AM ET to 4:00 PM ET,as of 9:56 AM PDT (12:56 PM ET). The S&P 500 is down 5.75%,while the Dow Jones is down 5.15%. The Nasdaq Composite fell 6.61%,or 1,131.9 points.
If the S&P 500 drops 7% from the close of the previous day, a Level 1 circuit breaker is activated. Trading may be suspended for 15 minutes if the index does drop by 7%.
Is a circuit breaker going to be activated?
Indeed,there is a good chance that the S&P 500 will drop by 7% or more. The current reduction (up to 7%) for Levels 2 (13%) and 3 (20%) is still well below those criteria.
How recently has a circuit breaker been activated?
On March 18, 2020, a market-wide circuit breaker was last activated. This happened in the midst of the extreme volatility brought on by the COVID-19 epidemic. Shortly after the market began, the S&P 500 fell more than 7%, triggering a Level 1 circuit breaker that stopped trading for fifteen minutes.
Why today stock market is down :
Stock indexes fell sharply on Thursday after making significant gains on Wednesday when President Trump announced a tariff truce. This could be a response to the White House’s explanation of the 145% tariffs on China. Although retail inflation decreased in March,the Fed may not be inclined to lower rates in May as a result.