Stock Market Decline refers to a period during which the prices of stocks in a financial market experience a significant and sustained decrease. This decline can be measured through various indices, such as the Dow Jones Industrial Average or the S&P 500, which track the performance of a specific set of stocks. A decline typically indicates a downturn in the market, often influenced by factors such as economic downturns, rising interest rates, lower corporate profits, geopolitical tensions, or changes in investor sentiment.
In investment terminology, a decline is often considered a bearish market phase, where investor confidence wanes, leading to increased selling and reduced buying activity. A stock market decline can vary in intensity—from minor corrections, where prices drop by 10% or more, to bear markets, where declines exceed 20% from recent highs. Understanding stock market declines is crucial for investors and analysts, as it affects investment strategies, portfolio management, and economic forecasts.
The U.S. stock market indices are experiencing a downturn, as losses continue from last week's sharp sell-off. This trend raises questions about the viability of a traditional end-of-year rally often…