The US stock market has entered a period of correction

Reuters reports that the US stock market has entered a period of correction. The S&P 500 index has fallen more than 10% from its February high. This represents a loss of about $5 trillion in market value. Such a sharp reversal compared to the beginning of the year raises concerns about further decline.

At the same time, experts at the agency note that corrections in the stock market are not a rare phenomenon. For example, the S&P 500 index has corrected 56 times since 1929, and only in 22 cases it transitioned to a bear market.

Corrections, unless they develop into a prolonged downturn, are usually much less damaging to financial markets. Since 1929, when the stock market has experienced temporary declines of 10% or more, the average decline from the high point to the low point has been 13.8%. In contrast, the same figure for bear markets has been a much steeper 35.6%.

According to Yardeni Research, a consulting agency, the average correction lasts about 115 days. The current correction has lasted only 22 days.