Correction

A 10-20% decline in a stock or market index from its recent peak.

What Is a Market Correction?

A correction is a decline of 10-20% from a recent peak in a stock index or individual stock. Corrections are a normal, healthy part of market cycles — the S&P 500 experiences a correction roughly once every 1-2 years on average.

Correction vs. Bear Market vs. Crash

• Pullback: 5-10% decline. Minor and frequent.
• Correction: 10-20% decline. More significant, but usually temporary.
• Bear market: 20%+ decline. Sustained downturn, can last months to years.
• Crash: Sharp, sudden decline (often 10%+ in days). Panic-driven.

Earnings During Corrections

Corrections that coincide with earnings season create unique opportunities on EarningsShot. Stocks that beat earnings during a correction often recover faster than the broader market, as strong fundamentals attract buyers who are looking for bargains.