S&P 500 Index Eyes Correction Territory

The S&P 500 index is on track to close in correction territory on Friday, marking the 103rd time in history if confirmed.

Market Performance

According to FactSet data, the gauge of large-cap U.S. equities SPX slipped by 21 points, or 0.5%, to approximately 4,116 during Friday afternoon. This decline represents a 10.3% drop from its previous cyclical high of 4,588.96 reached on July 31, 2023.

To confirm a correction, the S&P 500 must finish below 4,130.06, as reported by Dow Jones market data. Interestingly, the Nasdaq Composite recently entered correction territory on Wednesday.

Historical Trend

Based on historical data, the S&P 500 has experienced 15 corrections in the past. On average, it takes around three months for the index to recover its performance following a correction. Moreover, a year later, the index shows an average gain of 10.1%.

Long-Term Perspective

Analyzing data since 1928, the S&P 500 has generally shown resilience following a correction. On average, it registers a yearly increase of 9.1% after a correction.

Market Comparison

Despite the potential correction, the S&P 500 remains up by 7.2% year-to-date. In comparison, the Nasdaq Composite has achieved a substantial gain of 20.6%, while the Dow Jones Industrial Average has experienced a slight decline of 2.1%, according to FactSet data.

—Ken Jimenez contributed.