The S&P 500 has pulled back from its February high, entering correction territory after briefly closing over 10% below its peak. Investors are seeking clarity on the market’s direction. A look at history can provide an answer.
Market corrections, defined as a 10% drop from a 52-week high, have occurred 60 times since 1928, according to Deutsche Bank. In most cases, these corrections were not associated with a recession. The data shows that only 12 of the 60 corrections led to bear markets, where the S&P 500 falls at least 20% from its most recent all-time high.
Ryan Detrick, Carson Group’s Chief Markets Strategist, notes that despite current market volatility, he does not see a full-blown bear market on the horizon. “Maybe we go into a correction, but we do not see a bear market coming,” he said.
BMO Capital Markets’ Brian Belski also sees low likelihood of a full-bear market due to the speed and nature of recent corrections. He believes these types of corrections tend to recover quickly, with fundamentals still flashing green.
In light of this data, investors should remain calm and avoid panic decisions. While uncertainty surrounding President Trump’s tariffs and the economy persists, it is essential to reevaluate holdings and gauge preparedness for potential bear markets or recessions. With a 6,700 price target on the S&P 500, Belski suggests a patient approach to navigating current market uncertainty.
Source: https://www.fool.com/investing/2025/04/05/now-that-the-sp-500-has-had-a-correction-what-will