What does a bear market mean for a stock-market index?

A bear market is commonly defined as a decline of at least 20% in a stock-market index or another widely followed asset measure from a recent peak. The measurement is usually based on a closing level, and the decline is described as occurring over an extended period rather than as a routine daily move.

The term bear market describes a broad market condition, not necessarily every individual stock. Some companies may rise while the overall index falls. A bear market can reflect recession fears, falling corporate profits, financial stress, higher interest rates, geopolitical shocks, or other causes.

A bull market is the contrasting phrase for a sustained rise, although its exact threshold is less universally standardized. A bear market also differs from a correction, which is commonly used for a decline of about 10% from a recent high. These labels describe price movement; they do not by themselves predict when a recovery will occur.