Market Correction: What Does It Mean?

Stock markets have been choppy lately, pressured by concerns about tighter monetary policy, the impact of tariffs and mixed earnings reports from companies for the third quarter. On October 24, the S&P 500® index closed down 9.4% from its recent peak of 2,931 on September 20, 2018, while the Dow Jones Industrial Average closed down 8.4% from its recent peak of 26,828 reached on October 3, 2018. 

Both of these major stock indexes are now close to what is often called “correction” territory. That’s a fairly neutral term for what feels like a nerve-wracking drop to many investors. What does a correction mean? What’s likely to happen next and what can you do now? Here are answers to some commonly asked questions.

Read the full article by Schwab Center for Financial Research.