by Wolf Richter
It’s not the drop that worries me, it’s the historic neck-breaking volatility.
It started out ugly Sunday night and ended uglier today. Sunday evening, stock futures plunged 5%, hit limit down, and trading was halted. Futures remained pinned at limit down without further trading. When stocks started trading in the morning during regular hours, the S&P 500 Index opened at 2,490, down -8.1%. This was below the limit down rule during regular hours where trading should stop for 15 minutes if the index drops 7%. But it had blown through this limit-down from the first moment.