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Glossary

What is Market correction?

A correction is a sudden drop of about 10 percent from a recent high.

The simple explanation

Corrections are fairly common and often happen when prices have risen quickly. They are smaller than a bear market and are sometimes seen as a reset after a big run.

An example

The S&P 500 falls 10 percent over a few weeks and then stabilizes.

Why it matters

Corrections feel scary, but they are a normal part of how markets move.

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Related terms

Educational information, not financial advice.