Stocks entered a bear market. Here's what that means

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A bear market is considered an important barometer of investor pessimism and is symbolic of a deep and sustained market selloff. It is defined as a period in which either a stock or market index drops by 20% or more from a recent high point.

One of the broadest stock market indexes, the S&P 500, entered a bear market during Friday's trading. That means it had fallen a stunning 20% from a recent high in January.

Stocks have been whipsawed in recent weeks and months because of worries about high inflation and rising rates. Fears that these forces might tip the country into a recession have also picked up. Aside from inflation, a range of uncertainty has clouded the outlook for Wall Street. The ongoing war in Ukraine has led to higher commodity prices worldwide, and new COVID lockdowns in China have led to worries supply-chain issues will continue.

This comes after earlier this week Walmart and Target reported that they were seeing signs that their customers were shifting their shopping habits. Some were buying fewer items and others were staying away from more expensive ones.that customers were trading down to cheaper brands and choosing smaller sizes like half-gallons of milk and the store brand of lunch meat instead of a pricier brand-name one.

 

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