S&P 500 Flirts with First Correction Since 2023

The S&P 500 was teetering on the verge of a correction on Thursday afternoon as stocks continued to sell off amid growth concerns.

The S&P 500 fell as much as 1.7% in intraday trading Thursday, putting it 10.4% off its recent all-time high. The index has pared some of those losses and was slightly above the correction threshold (5,529) in recent trading.

Some market watchers have been warning of a correction for a while. It has been 343 trading days since the S&P 500’s last 10% pullback, nearly twice the average time between corrections (173 days) since 1929. 

Since 1928, the stock market has corrected 1.1 times a year on average, according to research from Ned Davis Research and LPL Financial. Severe corrections of 15% or more have occurred once every two years, and bear markets have hit once every three years, approximately. 

How the Current Sell-Off Compares

The market’s last correction was a slow burn. The S&P 500 slid 10.3% between July 31 and October 27, 2023, as the Federal Reserve signaled it would need to keep interest rates higher for longer to return inflation to its 2% target. That correction was a long time coming, but it was short-lived. Stocks rebounded out of the correction on the next trading day, October 30, and have been trending higher ever since. 

Stock market corrections tend to end more quickly than they come on. Since World War II, the average S&P 500 correction has taken five months to bottom and about four months to recover, according to Covenant Wealth Advisors. The average drawdown has been about 14%. 

The current downturn has been swift in comparison. The S&P 500 closed at a record just three weeks ago, on February 19, as promising earnings reports offset creeping tariff uncertainty. Stocks have fallen precipitously since then as Trump has threatened, imposed, and delayed a slew of tariffs that some economists say could raise consumer prices and slow economic growth.