List of Partners vendors. Your Money. Personal Finance. Your Practice. Popular Courses. Markets Stock Markets. Part Of. What Is a Stock Market Crash? Key Takeaways A stock market crash is an abrupt drop in stock prices, which may trigger a prolonged bear market or signal economic trouble ahead.
Market crashes can be made worse be fear in the market and herd behavior among panicked investors to sell. Several measures have been put in place to prevent stock market crashes, including circuit breakers and trading curbs to lessen the effect of a sudden crash. Article Sources.
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This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. A trading curb, also called "circuit breaker," is the temporary halting of trading so that excess volatility can be reined in and order restored.
Circuit Breaker Definition Circuit breakers temporarily halt trading on an exchange when a security or broad index moves in excess of a pre-set threshold amount. Best balance transfer cards. Best student credit cards. Best starter credit cards. The best online brokerages for beginners. The best investment apps. The best stock trading apps. Best robo advisors. Average stock market return. Car insurance.
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Average mortgage payment. Average closing costs. During the week of Feb. The Dow would go on to decline by 9. However, unlike prior crashes whose recoveries required years, the stock market rebounded back to its pre-pandemic peak by May of Investing Best Accounts.
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