A bear market is a decline of at least 20% in a broad stock index, measured on closing prices from its most recent high. A bull market is the opposite: a rise of at least 20% from a low. Ned Davis Research data published by Hartford Funds covers the S&P 500 from 1928 to March 2025. Over that period the average bear market lasted 289 days (about 9.6 months) and cost 35.24%, and the average bull market lasted 988 days (about 2.7 years). Bulls last longer, while bears are shorter and steeper.
The S&P 500 is near the top of a cycle as of late October 2026. The index set a record on 6 October 2026, with an intraday high of 7,844.52, according to Motley Fool coverage. That bull market started at the closing low of 12 October 2022. It was only confirmed on 19 January 2024, when the index closed above its January 2022 record. That 15-month gap shows the core problem with these labels: they are applied after the fact.
The definitions in detail
Bear market
- Threshold: a drop of 20% or more from the most recent high, on a closing basis (Hartford Funds / Ned Davis Research).
- Correction: a drop of 10% to 19.9% is called a correction, not a bear market.
- Duration: the Ned Davis table sets no minimum length. The 2020 decline lasted 33 days and is counted as a bear market.
- Scope: the term usually refers to a broad index such as the S&P 500 or the Dow Jones Industrial Average. People also apply it to sectors and single stocks.
Bull market
- Threshold: a rise of 20% or more from a closing low.
- Record-high test: a stricter measure, used in Reuters coverage of the 2024 confirmation, also requires a new record close. The bull market is then dated back to the low. The Dow and the S&P 500 confirmed on different dates, 13 December 2023 and 19 January 2024. Each index has its own low and its own record.
Why closing prices matter
The S&P 500 fell 18.9% from its 19 February 2025 closing high of 6,144.15 to its 8 April 2025 closing low of 4,982.77. It briefly traded beyond the 20% mark during the session, but on the closing-price measure it never entered a bear market.
Side-by-side comparison
| Bull market | Bear market | |
|---|---|---|
| Threshold | +20% from a closing low | −20% from a closing high |
| Average length (S&P 500, 1928–Mar 2025) | 988 days (~2.7 years) | 289 days (~9.6 months) |
| Count since 1928 | 28 | 27 |
| Average move | +112% | −35.24% |
| How it is confirmed | Often only at a new record close | At the 20% closing threshold |
Source for the figures: Hartford Funds, citing Ned Davis Research.
Bear markets have occurred about every 3.5 years on average: roughly every 1.5 years from 1928 to 1945, and about every 5.1 years since 1945. The sharpest rebounds tend to happen during the declines. Ned Davis data puts about 42% of the S&P 500's strongest days in the 20 years to March 2025 inside bear markets. Another 36% came in the first two months of a bull market.
Every S&P 500 bear market since 1929
The full Ned Davis table lists 27 bear markets from 1929 to 2024. These are the ones since 1968:
| Start | End | Decline | Length |
|---|---|---|---|
| 29 Nov 1968 | 26 May 1970 | −36.06% | 543 days |
| 11 Jan 1973 | 3 Oct 1974 | −48.20% | 630 days |
| 28 Nov 1980 | 12 Aug 1982 | −27.11% | 622 days |
| 25 Aug 1987 | 4 Dec 1987 | −33.51% | 101 days |
| 24 Mar 2000 | 21 Sep 2001 | −36.77% | 546 days |
| 4 Jan 2002 | 9 Oct 2002 | −33.75% | 278 days |
| 9 Oct 2007 | 20 Nov 2008 | −51.93% | 408 days |
| 6 Jan 2009 | 9 Mar 2009 | −27.62% | 62 days |
| 19 Feb 2020 | 23 Mar 2020 | −33.92% | 33 days |
| 3 Jan 2022 | 12 Oct 2022 | −25.43% | 282 days |
Ned Davis splits some long downturns into separate bear markets. The dot-com decline appears as two entries, 2000–01 and 2002, and the financial crisis as 2007–08 and early 2009. Other sources that count the 2000–02 and 2007–09 declines as single events give larger single drawdowns, so the counting method matters when comparing figures.
The early 1930s contain six separate bear markets in this table, from September 1929 to February 1933. The deepest single leg, November 1931 to June 1932, fell 61.81%.
Bear markets and recessions are different things
A bear market is a price event. A recession is an economic event. In the US, recessions are dated by the National Bureau of Economic Research (NBER). The NBER describes a recession as "a significant decline in economic activity that is spread across the economy" that "lasts more than a few months."
The two often overlap, but not always. Hartford Funds counts 27 bear markets since 1928 but only 15 recessions over the same period. The 1987 bear market, a 33.51% fall in 101 days, is one example of a bear market without a matching recession.
The NBER also dates recessions well after they begin. Its committee "tends to wait to identify a peak until a number of months after it has actually occurred." Its own announcement records show the lag:
| Turning point | Announced | Lag |
|---|---|---|
| March 2001 peak | 26 Nov 2001 | ~8 months |
| December 2007 peak | 1 Dec 2008 | ~12 months |
| June 2009 trough | 20 Sep 2010 | ~15 months |
| February 2020 peak | 8 Jun 2020 | ~4 months |
For example, the S&P 500 bottomed on 9 March 2009. The NBER announced 18 months later that the recession had ended in June 2009. Official economic labels arrive after stock prices have already moved.
The NBER data also shows the same imbalance as in stocks. From 1945 to 2020, US contractions averaged 10.3 months and expansions 64.2 months.
Is it a bear market, a correction or a bull market?
Answer three short questions about a price move to see which label the 20% closing-price rules give it.
What are you measuring?
- A broad stock index, such as the S&P 500 or the Dow Jones Industrial Average → next question
- A sector, a single stock or a single crypto asset → The label says less here
Which way has the index moved?
- Down from its most recent high → next question
- Up from a low → next question
On closing prices, how far is it below its most recent closing high?
- 20% or more at the close → Bear market
- 10% to 19.9% at the close → Correction, not a bear market
- Less than 10% at the close → Neither label applies
- Past 20% only during the session, not at any close → Not a bear market on the closing measure
On closing prices, is it at least 20% above its closing low?
- Yes → next question
- No → Not a bull market yet
Has it also set a new record close?
A closing drop of 20% or more from the most recent high meets the bear-market definition. No minimum length applies: the 2020 decline lasted 33 days and is counted. From 1928 to March 2025, S&P 500 bear markets averaged 289 days and a 35.24% decline (Ned Davis Research via Hartford Funds).
A drop of 10% to 19.9% is called a correction. It becomes a bear market only if the index closes 20% or more below its most recent high.
A closing drop under 10% is below the 10% to 19.9% correction range and the 20% bear-market threshold.
The rule uses closing prices. The S&P 500 fell 18.9% from its 19 February 2025 closing high of 6,144.15 to its 8 April 2025 closing low of 4,982.77. It briefly traded beyond the 20% mark during the session, but it never entered a bear market on the closing-price measure.
A rise of 20% or more from a closing low meets the basic bull-market definition. The stricter test used in Reuters coverage also requires a new record close; only then is the bull market confirmed and dated back to the low.
Both tests are met, so the bull market is dated back to its closing low. The current S&P 500 bull market started at the 12 October 2022 low and was confirmed on 19 January 2024, 15 months later. From 1928 to March 2025, S&P 500 bull markets averaged 988 days.
A rise of less than 20% from the closing low does not meet the bull-market definition.
The 20% rule was built for broad stock indexes. People also apply it to sectors and single stocks, but single assets, especially volatile ones, can cross 20% far more often than an index. Drawdown from a high and recovery from a low still apply.
It only applies the 20% closing-price definitions to a move that has already happened. It cannot say when a cycle will start or end, it does not date recessions, and past cycles do not predict future ones.
Where the words come from
The usual explanation goes back to London's Exchange Alley in the early 18th century. Traders who sold shares they did not yet own were called "bear-skin jobbers": they sold the bear's skin before catching the bear. The account is widely repeated, but its origin is traditional rather than documented. "Bull" may come from bull-baiting, a blood sport of the period often paired with bear-baiting.
Thomas Mortimer's Every Man His Own Broker, first published in 1761, defines a bull as someone in 'Change Alley who contracts to buy securities without the means or intention to pay. Such a buyer must resell before the payment date. The image of a bull's horns thrusting up and a bear's paws swiping down is a later folk explanation.
The Charging Bull in lower Manhattan, by sculptor Arturo Di Modica, was set up without permission outside the New York Stock Exchange on the night of 14 December 1989. Police impounded it. The city then reinstalled it near Bowling Green, where it was rededicated on 21 December 1989.
Investor behaviour in each phase
Two well-documented ideas explain much of what happens around market turns.
- Loss aversion. In their 1979 Econometrica paper, "Prospect Theory: An Analysis of Decision under Risk", Daniel Kahneman and Amos Tversky wrote that "losses loom larger than gains." This helps explain selling during a bear market. The often-quoted ratio of "about twice as painful" comes from later work, and studies disagree on how large the effect is.
- "Irrational exuberance". Federal Reserve Chairman Alan Greenspan used the phrase in a speech to the American Enterprise Institute on 5 December 1996. He asked how anyone would know when "irrational exuberance has unduly escalated asset values." He pointed to Japan's decade of falling asset prices as an example of the risk.
The Ned Davis best-days data adds a practical point. Many of the biggest gains came during bear markets or just after them. An investor who sold during the decline and waited for clear evidence of recovery would have missed most of those days.
Terms you will see during a bear market
- Rebalancing. Returning a portfolio to its target mix, for example 60% stocks and 40% bonds, after market moves have shifted it. After a long rally the stock share grows above target; after a decline it shrinks. Rebalancing reverses that drift by rule, without any forecast.
- Dollar-cost averaging. Investing a fixed amount at regular intervals. A fixed amount buys more units when prices are low and fewer when they are high.
- Tax-loss harvesting and the wash-sale rule (US). Selling at a loss can offset gains. Under IRS rules, the loss is disallowed if you buy substantially identical stock or securities within 30 days before or after the sale. Purchases in your IRA or Roth IRA, or by your spouse, also count. The disallowed loss is not lost: it is added to the cost basis of the new shares.
- Dead cat bounce. A short rally inside a longer decline, after which the decline continues. It can only be identified afterwards.
- Capitulation. A wave of selling by holders who give up. Commentators often link it to market bottoms, but no standard measure defines it.
A note on crypto
The 20% rule was built for broad stock indexes. Single assets, especially volatile ones, can cross 20% far more often than an index, so the label says less about them. The underlying ideas still apply: drawdown measured from a high, recovery measured from a low, and labels that arrive late.
Frequently asked questions
What is the difference between a bull and a bear market?
A bear market is a closing decline of at least 20% from a high in a broad index. A bull market is a rise of at least 20% from a low. Some measures also require a new record close before a bull market is confirmed.
How long do they last?
For the S&P 500 from 1928 to March 2025, bear markets averaged 289 days and bull markets 988 days (Ned Davis Research via Hartford Funds). The shortest bear market in that table, in 2020, lasted 33 days. The longest since 1929, in 1973–74, lasted 630 days.
Is a bear market the same as a recession?
No. There have been 27 bear markets since 1928 but only 15 recessions. The NBER dates recessions from economic data, often many months after the fact.
Can you tell when a bull market will end?
Not in real time. Both labels are confirmed only after the threshold or a new record is reached. The October 2022 low was confirmed as the start of a bull market 15 months later.
Limitations: most figures are for the US S&P 500 and come from one dataset (Ned Davis Research, through March 2025). Other datasets split and date cycles differently, as the 2000–02 and 2007–09 entries show. Past cycles do not predict future ones.
