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S&P 500 Correction Timeline: When Will the Market Rebound?

The S&P 500 (SPX) has entered a correction, leaving investors wondering: How long will the downturn last, and when can we expect a recovery? Historical data provides key insights into what could come next for the U.S. stock market.

Understanding the Current Market Correction

The S&P 500 hit an all-time high on February 19, 2025, but since then, the market has entered a correction phase. If this follows the median correction pattern seen over the past century, investors can expect a total decline of 13.6% before the market bottoms out. Based on historical trends:

  • The correction is likely to reach its low point around May 17, with the S&P 500 dropping to 5,309.
  • A recovery to previous highs would then take nearly four months, bringing the market back to new record levels by September 11.

Correction vs. Bear Market: What’s the Difference?

Corrections are typically short-lived downturns of 10%-20%, while bear markets involve a decline of more than 20% from the peak. Based on historical data since 1928:

  • 60% of corrections do not turn into bear markets.
  • The average correction lasts just over three months before rebounding.

However, if this downturn extends into a full-fledged bear market, the scenario changes dramatically.

What If This Becomes a Bear Market?

If the current correction turns into a bear market, history suggests a median decline of 32.7%, which would mean:

  • A prolonged downtrend lasting until November 7, 2025.
  • The S&P 500 dropping an additional 25.1% beyond its current losses.
  • A full recovery taking until July 25, 2027, before the market reaches new highs.

Past Market Corrections: A Range of Outcomes

While the median correction follows a predictable pattern, past downturns have varied widely in duration and severity:

Correction Type Shortest Duration Longest Duration Shallowest Drop Deepest Drop
Standard Correction 13 days 531 days -10.1% -19.9%
Bear Market 261 days (median) Over a year -20%+ -50%+

What This Means for Investors

The next two months could be critical in determining whether this downturn remains a typical correction or morphs into a bear market. Investors should closely monitor key levels and historical trends while keeping an eye on economic indicators and Federal Reserve policies that could influence market sentiment.

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