Why stock market corrections happen At the most basic level, market corrections (and all types of market declines, for that matter) occur because investors are more motivated to sell than to buy. A slowing or shrinking economy: This is a solid, “fundamental” reason for the market to decline.

bear market

A correction is a decline of 10% or greater in the price of a security, asset, or a financial market. Corrections can last anywhere from days to months, or even longer. While damaging in the short term, a correction can be healthy, adjusting overvalued asset prices and providing buying opportunities.

Here are three reasons the stock market is falling: Inflation fears. Everyone is suddenly concerned about inflation. Recent economic data show that companies are paying higher prices for their raw materials due to supply shortages, and are raising prices to cover the higher costs.

Day Losers

How Much The Stock Market Move On Average A Day. From 1999 – 2019, the stock market as defined by the S&P 500 moves on average -1% and +1% a day, for 70% of the days.

Day Gainers

Google share prices surged Friday a day after the company reported earnings, adding a total of $52 billion in market capitalization as of the start of trading, in the largest single-day gain ever, according to S&P Dow Jones Indices.

Best-performing S&P 500 stocks of 2020

Whether you’re regularly contributing to a 401(k) or an IRA, or investing through your broker, it’s wise to continue doing so during a recession if you can. The idea of dollar-cost averaging is that you buy shares at higher prices when the economy is strong, and lower prices during a recession.