What is the term for a prolonged decline in stock prices?

A prolonged decline in stock prices is called a bear market.

The term generally describes a sustained fall across a broad market or major index, accompanied by weakening confidence and widespread pessimism. In modern financial usage, a decline of at least 20% from a recent peak is often used as a practical benchmark, although definitions vary by source and market.

A bear market is not the same as a correction. A correction is usually a shorter decline of roughly 10% to 20%, while a bear market is deeper and more persistent. A sudden crash can be sharper but shorter, so speed and duration help distinguish the terms. The opposite condition is a bull market, characterized by rising prices and optimism.

The imagery comes from the bear’s habit of swiping downward with its paws; the bull, by contrast, is associated with thrusting upward. Bear markets can occur during recessions, financial crises, geopolitical shocks, or periods when investors believe valuations have become excessive. They may affect stocks broadly or be limited to a particular sector.