Stock Market Correction

A Stock market correction is a short-term decline in Stock prices, typically defined as a drop of 10% or more from recent highs. Corrections are considered a natural part of market cycles and can occur in both bull and Bear Markets. They often signal a re-evaluation of Stock valuations and can be triggered by various factors including economic data reLeases, geopolitical events, or changes in Interest Rates.

For example, if the S&P 500 Index reaches 4,000 points and then falls to 3,600 points, this 10% drop would constitute a correction. Historical cases include:

• In early 2016, the S&P 500 experienced a correction, dropping about 10% from its peak due to concerns over global economic growth.
• In March 2020, the Stock market faced a rapid correction as fears about the COVID-19 pandemic led to significant selling pressure, resulting in a decline of over 30% in a matter of weeks.