When the New York Stock Exchange opens on Monday at 9:30 a.m. we will see just how seriously the world takes the assault Elon Musk and Donald Trump launched on the American system of government.
What follows is a guide for interpreting the drop.
First, some ground rules:
The securities markets have a system of circuit breakers to halt massive declines.
There are three circuit breakers that are measured by calculating a percentage decline in the S&P 500 from the close of the previous day:
Level 1 (7 percent),
Level 2 (13 percent), and
Level 3 (20 percent).
If Levels 1 or 2 are tripped before 3:25 p.m., all trading is halted for 15 minutes.
If Level 3 is tripped at any point in the day, trading is halted for the remainder of the day.
Last Friday the S&P closed at 6,041.
Trading ended at 4:00 p.m., per the norm,
but at 1:15 p.m. a selloff started when reports of Trump’s proposed tariffs against Canada and Mexico hit the wires.
In less than three hours, the S&P lost 1.1 percent from its daily high.
Here are the S&P’s circuit breaker numbers for Monday:
Level 1: 5,617
Level 2: 5,255
Level 3: 4,832
For context, since 2008 we have only had seven S&P drops greater than 7.6 percent in a single day https://www.thebulwark.com/p/follow-the-money-trump-musk-market-reaction-tariffs-canada-mexico-nyse-dow-sp500-treasury
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