In the stock market, a correction is typically defined as a decline of 10% or more from a recent peak. This drop can happen over a short period, and it generally reflects a healthy market adjustment rather than a full-blown bear market, which involves a 20% or more drop.Sure Poe! Crashes are wonderful. Markets haven’t recovered. We are down 10 plus percent in the last 3 months.
So, for a market to be considered in correction territory, the overall value of a major stock index (like the S&P 500) needs to fall by 10% or more from its most recent high.