Market correction

{{Short description|New equilibrium price of a commodity}}

In stock markets, a market correction is a 10% drop in the value of a stock index.{{Cite web |url=https://money.usnews.com/investing/investing-101/articles/2018-02-05/what-is-a-stock-market-correction |title=What Is a Stock Market Correction? |last=Hicks |first=Coryanne |date=2018-02-05 |website=U.S. News |access-date=2020-03-18}}{{Cite news |url=https://www.nytimes.com/2020/02/27/business/what-is-a-stock-market-correction.html |title=What Is a Stock Market Correction? |date=2020-02-27 |work=The New York Times |access-date=2020-03-18 |language=en-US |issn=0362-4331}} Corrections end once stocks attain new highs.{{Cite web|url=https://www.marketwatch.com/story/stop-saying-the-dow-is-moving-in-and-out-of-correction-that-is-not-how-stock-market-moves-work-2018-03-23|title=Stop saying the Dow is moving in and out of correction! That is not how stock-market moves work|last=DeCambre|first=Mark|website=MarketWatch|language=en-US|access-date=2020-03-18}} Stock market corrections are typically measured retrospectively from recent highs to their lowest closing price and are sharper and steeper than bear markets. The recovery period can be measured from the lowest closing price to new highs, to recovery.{{Cite web|url=https://blog.wealthfront.com/stock-market-corrections-not-as-scary-as-you-think/|title=Stock Market Corrections: Not As Scary As You Think|date=2018-05-11|website=Wealthfront Blog|access-date=2020-03-18}} Gains of 10% from the low is an alternative definition of the exit of a correction.{{Citation needed|date=March 2020}}

A sustained drop of 20% is not a correction, but a bear market.

A correction may also be a drop in a commodity price, as in the 2000s United States housing market correction.