In investing, a market decline of at least 20% from a recent peak is commonly called a bear market.
The 20% threshold is a widely used market convention rather than a universal legal definition. It is usually measured for a broad index, such as the S&P 500, from a closing high to a later closing low. The term can also describe prolonged weakness in a particular asset or sector.
A bull market refers to a sustained rise in prices. A correction is commonly described as a decline of at least 10% but less than 20%, though definitions vary. A bear market therefore describes a deeper fall than an ordinary correction.
Bear markets can result from recessions, financial crises, changing interest rates, geopolitical shocks, or deteriorating company profits. The label describes price movement, not a guaranteed prediction about what happens next.