Bear Market In The Offing, AP Analysts Warn U.S. Investors

Investors on Wall Street need a place to hide. The stock market’s skid this year has pulled the S&P 500 close to what’s known as a bear market.

Photo Insert: The last bear market happened just two years ago.

Rising interest rates, high inflation, the war in Ukraine, and a slowdown in China’s economy have caused investors to reconsider the prices they’re willing to pay for a wide range of stocks, from high-flying tech companies to traditional automakers, Stan Choe and Alex Veiga reported for the Associated Press (AP).

The last bear market happened just two years ago, but this would still be a first for those investors that got their start trading on their phones during the pandemic.

For years, thanks in large part to extraordinary actions by the Federal Reserve, stocks often seemed to go in only one direction: up.

Now, the familiar rallying cry to “buy the dip” after every market wobble is giving way to fear that the dip is turning into a crater.

A bear market is a term used by Wall Street when an index like the S&P 500, the Dow Jones Industrial Average, or even an individual stock, has fallen 20% or more from a recent high for a sustained period of time.

Bears hibernate, so bears represent a market that’s retreating, said Sam Stovall, chief investment strategist at CFRA. In contrast, Wall Street’s nickname for a surging stock market is a bull market, because bulls charge, Stovall said.

The S&P 500 index slipped 22.89 points Thursday to 3,900.79. It’s now down 18.7% from its high of 4,796.56 on Jan. 3. The Nasdaq is already in a bear market, down 29.1% from its peak of 16,057.44 on Nov. 19. The Dow Jones Industrial Average is more than 15% below its most recent peak.

The most recent bear market for the S&P 500 ran from February 19, 2020 through March 23, 2020. The index fell 34% in that one-month period. It’s the shortest bear market ever.

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