Market correction

From Wikipedia, the free encyclopedia

A market correction is a rapid change in the nominal price of a commodity, after a barrier to free trade has been removed and the free market establishes a new equilibrium price. It may also refer to several such single-commodity corrections en masse, as a collective effect over several markets concurrently.[1][2][3]

Stock market correction[edit]

A stock market correction refers to a 10% pullback in the value of a stock index.[4][5] Corrections end once stocks attain new highs.[6] Stock market corrections are typically measured retrospectively from recent highs to their lowest closing price. The recovery period can be measured from the lowest closing price to new highs, to recovery.[7] Gains of 10% from the low is an alternative definition of the exit of a correction.[citation needed]

Declines of 20% or more are classified as a bear market.

See also[edit]


  1. ^ "Market Correction: What Does It Mean?". Schwab Brokerage. January 25, 2022. Retrieved July 5, 2022.
  2. ^ "The Data Point: What's a stock market correction?". NBC News. January 25, 2022. Retrieved July 5, 2022.
  3. ^ "Europe faces 'severe' risk of disorderly financial market correction: Lagarde". Reuters. June 20, 2022. Retrieved July 5, 2022.
  4. ^ Hicks, Coryanne (2018-02-05). "What Is a Stock Market Correction?". U.S. News. Retrieved 2020-03-18.
  5. ^ Times, The New York (2020-02-27). "What Is a Stock Market Correction?". The New York Times. ISSN 0362-4331. Retrieved 2020-03-18.
  6. ^ DeCambre, Mark. "Stop saying the Dow is moving in and out of correction! That is not how stock-market moves work". MarketWatch. Retrieved 2020-03-18.
  7. ^ "Stock Market Corrections: Not As Scary As You Think". Wealthfront Blog. 2018-05-11. Retrieved 2020-03-18.