The S&P 500 slipped to 21% below its record high in January and stayed there until markets closed on Monday.
This tumble marked the beginning of what many consider a “bear market.”
Inflation, rising interest rates, the war in Ukraine, and slowdowns in the Chinese economy have rattled investors. The S&P 500 narrowly avoided a bear market last month.
Why is it called a “bear market?” The term refers to bears’ hibernation habits—an apt analogy for a retreating market, said Sam Stovall, chief investment strategist at CFRA.
It occurs when an individual stock or an index such as the S&P 500 or the Dow Jones Industrial Average falls by 20% or more from a recent high for a sustained amount of time.
The Nasdaq Composite Index of tech stocks is also in a bear market.
This story originally appeared in WORLD. © 2022, reprinted with permission. All rights reserved.