How the S&P 500 Performs After Closing in a Bear Market

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The S&P 500 fell into a bear market on Monday, down more than 20% from its record high on Jan. 3. Many stocks that soared during the pandemic rally, such as those in the technology and consumer-discretionary sectors, have been hit hard in this year’s downturn.

How long will the market pain last?

Since 1950, the S&P 500’s median return one month after closing in a bear market was 2.9%, according to Dow Jones Market Data. Three months after crossing the threshold, the median return was 5.7%, and after a year, it was 23.9%.

Stocks were down in the year following bear-market entrances three out of 12 times since 1950, including a 29.1% decline that started in July 2008.

Investors will be closely watching the Federal Reserve’s policy meeting this week. The central bank is likely to consider a larger-than-expected 0.75-percentage-point interest-rate increase, The Wall Street Journal reported on Monday.