What Is a Bear Market, and What Does It Mean for the Economy?
Summary from the AllSides News Team
The S&P 500 entered “bear market” territory on Monday as stock prices fell sharply. What is a bear market, and what does this mean for the economy at large?
Bear markets occur when stock prices fall more than 20% from recent highs, and they often coincide with recessions. The S&P 500 index, which measures 500 of the largest U.S. companies, also briefly dipped into bear market territory in May. Analysts generally agree that investors’ fears about inflation — and the interest rate hikes used by the Federal Reserve to fight inflation — are driving current stock trends. On Monday, investors were caught between Friday’s hot inflation report and an expected 0.75% interest rate hike at the Fed’s Wednesday meeting.
Monday’s selloff impacted stock exchanges in Asia and Europe as well. The cryptocurrency market also dove to new lows, leading crypto exchange CoinDesk to lay off 1,100 employees. While a bear market is bad news for stock investors, analysts appeared divided on how much damage it would do to the rest of the economy.
Coverage was widespread and generally balanced across the spectrum on Tuesday, particularly in business-focused outlets. “Bear” themes were common in economic reporting, including images of bears and taglines like “Poking the Bear.” While some commentators raised fears of a recession, others stressed that the bear market was only temporary.
Featured Coverage of this Story
From the Center
Stocks have officially entered bear market territory—here’s what that means and what you should do
The months-long slide for the S&P 500 index has officially thrown stocks far enough off of their all-time highs to be considered a bear market.
Since the beginning of 2022, the S&P 500 index is down nearly 21% as of Monday afternoon, with companies like Amazon and Google parent Alphabet leading the way with their 39% and 27% respective drops. Elon Musk’s Tesla has also lost 45% of its market value since January — shaving more than $500 billion off of its market cap.
The problem has been exacerbated by inflation and global uncertainty, with experts predicting that a recession could be around...
From the Left
What Happens When Stock Markets Become Bears
The S&P 500 on Monday dropped into its second bear market of the pandemic, crossing a symbolic and worrisome threshold as stocks plunge following a meteoric rise over the last two years.
Bear markets — when stocks decline at least 20 percent from their recent peaks — are relatively rare, and they frequently precede a recession. This sell-off, dragging the S&P down from a peak on Jan. 3 (which reflects the new bear market’s starting point), comes as concerns mount over high inflation, the war in Ukraine, Covid and the Federal Reserve’s...
From the Right
S&P 500 enters 'bear market' — here's what that means
The S&P 500 has fallen into a bear market, an indicator that investors are worried about the economy’s future as interest rates rise.
A bear market is a term used to describe an index dropping by at least 20% from a recent high. The S&P 500, which is a basket containing 500 of the biggest U.S. companies, was down 21.3% after open on Monday from its most recent high at the beginning of the year.
The tech-heavy Nasdaq index has already been in bear market territory for quite a while. It is now down...
AllSides Picks
April 16th, 2024
April 18th, 2024
More News about Economy and Jobs from the Left, Center and Right
From the Left
From the Center
From the Right
