Robinhood Halts Trading Amid Major Stock Market Sell-off

NEW YORK CITY (TND) — In a surprising move on Monday, the investment platform Robinhood hit the brakes on trading as the stock market faced a significant sell-off. The S&P 500 dropped a dramatic 4% right out of the gate, while the Dow Jones Industrial Average took a nosedive of 1,197 points, which is about 3%, by 9:35 a.m. The wave of panic didn’t just stay in the U.S.; it also led to a staggering 12.4% drop in Japan‘s Nikkei 225.

Users of Robinhood took to X (formerly Twitter) to show alerts they were receiving in the app. One prominent message warned that the “24 Hour Market is currently unavailable,” but assured users they could still place orders for future trading sessions.

A source who spoke to The National Desk (TND) mentioned that while there were some canceled trades overnight, Robinhood managed to get back on track when the market officially opened.

The company clarified through its website that it follows the stock market “circuit breakers.” These are set rules put in place by the U.S. Securities and Exchange Commission to temporarily stop trading during extreme market volatility. Specifically, if the S&P 500 drops by 7% from the previous day’s close, a Level 1 circuit breaker kicks in, pausing trading for 15 minutes. If it were to plunge by 20%, trading would be halted for the rest of the day under a Level 3 circuit breaker.

Meanwhile, Rep. Marjorie Taylor Greene from Georgia shared her thoughts on X, suggesting that the hefty brokerage firms were reporting glitches for retail investors while institutional ones were moving along just fine. “That’s too many platforms to be a coincidence,” she tweeted, hinting at a conspiracy to prevent panic selling and future market crashes. “Go ahead, call me a conspiracy theorist, I could care less. But I’ll challenge you back. Prove me wrong.”

Robinhood faced backlash in 2022 when retail traders sent stocks like GameStop, AMC, and Blackberry soaring. The platform ended up halting trading on these popular stocks and had to pay a hefty $70 million in fines and restitution to affected investors.