Has the Stock Market crashed?

What is a stock market crash?

The most recent stock market crash was at the start of the COVID-19 pandemic in early 2020. There’s no specific number that indicates a crash, but the context and surroundings made it seem factual. The S&P 500 stock index typically changes between -1% and 1% on any given day. Anything outside these parameters could be considered an active day on the stock market — either good or bad.

If the S&P 500 drops 7% in a single day, trading may be halted for 15 minutes. This particular scenario marks a very bad day on Wall Street. A crash is marked by a sharp and sudden drop in stock prices, usually following an uptrend in the stock market, also known as a Bull Market.

Are we in a Bear Market?

This year, the stock market is seeing some of the greatest fluctuations since the 2008 market crash. The markets have been experiencing extreme volatility over concerns about rising inflation and interest rates. Markets continued to dip in June, as inflation numbers hit a 40-year high. On June 13, the S&P 500 fell back into a bear market. The good part about history is that it can inform us about the causes, effects, and recovery methods from previous stock market crashes, and based on that, we can try to anticipate the the duration of a bear market. But, no one gets a notice before announcing the time, nature, and the projected magnitude for the future.

Historical Market Crashes

• 1929: The Dow Jones Industrial Average declined nearly 13 percent. The stock market plunged in response to a contracting economy and investor panic, marking the start of the Great Depression. The market dropped more than 80% below peak prices, and took over two decades to recover.

• 1987: The Dow Jones Industrial Average declined nearly 23 percent. The market plunged due to a market decline, investor panic, and early computerized trading gone wrong - the day is also known as Black Monday. The market recovered within two years.

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• 2000: Following a surge of investing and speculation in technology & internet related ventures during the 1990s, the Dot-Com Bubble burst in March 2000. The S&P 500 dropped nearly 50% and took seven years to recover.

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• 2008: In response to the housing bubble and subprime mortgage crisis, the S&P 500 lost nearly half its value and took two years to recover. Also known as The Great Recession.

• 2020: As COVID-19 spread globally in February 2020, the market fell by over 30% in a little over a month. But by August 2020, the market had already rebounded, taking six months to recover.