Even after its steep drops Friday and Monday, the Standard & Poor’s 500 index has yet to decline 10 percent from its most recent peak, which is known on Wall Street as a “correction.”
Not only are corrections common during bull markets, they’re seen as entirely normal and even healthy. They allow markets to remove speculative froth after a big run-up and allow investors to buy stocks at more reasonable prices.
The S&P 500, the market’s most widely used benchmark, is now down 7.8 percent from its most recent peak set on January 26. The S&P 500 has gone without a correction for about two years, an unusually long gap.
Here are the past 10 corrections in the S&P 500 index:
Source: S&P Dow Jones Indices