“Bear market” is a term used by investors to describe a steep and sustained market downturn. Technically, it’s a drop of 20% or more from recent highs. The tech-heavy Nasdaq Composite stock index is already in a bear market. Investors commonly apply the phrase to a broad stock index like the S&P 500 or Dow Jones Industrial Average, but it also works for individual stocks.
By comparison, a “bull market” is a period when stocks are surging, which has largely been the case since the Great Recession. The last bear market occurred in February and March 2020, when the S&P 500 slid 34%. However, stocks rebounded by mid-August.
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