S&P 500 falls 3.8% as circuit-breaker fears grow after Trump touts record highs
S&P 500 falls a day after record-high post
The S&P 500 fell as much as 3.8% on Thursday. The drop came less than a day after President Donald Trump praised Wall Street record highs.
Trump wrote on Wednesday on Truth Social: "Stock Market just hit another Record High—91 Days in just a short period of time—Less than two years. Your 401(k)s are through the roof."
Wall Street had risen on Wednesday after Democratic midterm election wins. The S&P 500 gained 1.6% that day, while the Dow Jones Industrial Average rose by more than 1,500 points. Thursday's fall removed that gain in one session.
Key numbers from Thursday's drop
- S&P 500: down as much as 3.8% on Thursday.
- First circuit-breaker level: 7,150.41 points, a 7% fall from the previous close.
- Second level: 6,689.09 points, a 13% fall.
- Third level: 6,150.89 points, a 20% fall.
- Nasdaq Composite: down nearly 5% at about 11 a.m. ET.
- S&P 500 at about 11 a.m. ET: down 3.2%.
- Nvidia: down more than 6%.
- Semiconductor index: down nearly 11%.
- Bitcoin: fell below $76,000.
How US circuit breakers work
A circuit breaker is a rule that pauses stock trading when losses are very large. The aim is to slow panic selling.
The first level is a 7% fall in the S&P 500. If that level is reached before 3:25 p.m. ET, trading stops across US stock markets for 15 minutes. The report said the index would need to fall another 3.2 percentage points from its earlier decline to reach that level.
A 13% fall would cause another 15-minute pause. A 20% fall would stop trading for the rest of the day. The first two levels stop applying at 3:25 p.m. ET. The 20% level applies all day.
The rules cover the whole US stock market, not only S&P 500 companies. A halt would also affect companies listed on the Nasdaq and other US exchanges.
AI stocks and crypto under pressure
Technology and AI-related stocks were hit hard. The report said investors were still reacting to Tuesday's election results and worried about stricter oversight of data-center building.
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, told Reuters: "We suspect there is going to be some scrutiny on this aggressive AI buildout."
The sell-off also reached crypto. Bitcoin fell below $76,000. Decrypt reported that about $428 million in leveraged long positions were liquidated within an hour. A leveraged long position is a bet that price will rise, made with borrowed money. Liquidation means the bet was closed by the platform after losses.
What is confirmed and what is still unclear
Confirmed in the report: the S&P 500 had not reached its first circuit breaker at the time of reporting. The reported falls in stocks and Bitcoin, and the circuit-breaker levels for Thursday, are also stated in the source.
Still unclear: the source does not say why the sell-off happened with certainty. It reports concerns about inflation, the Federal Reserve's next interest-rate decision, and possible scrutiny of AI building after the election wins.
Why traders watched circuit-breaker levels
Traders watched the levels because a 7% fall would pause all US stock trading for 15 minutes. A 20% fall would end trading for the day. The source presents this as a risk during a sharp fall, not as an event that had happened.
Friday jobs report in focus
Investors are waiting for Friday's October employment report. The source says the report could give more clues about the direction of US monetary policy, meaning the Federal Reserve's interest-rate decisions.
Sources for this report
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.
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