An ugly end to a cruel April on Friday saw the S&P 500 post its second correction — a drop of 10% from a recent peak — so far this year.
The large-cap benchmark SPX, -3.63% ended a topsy-turvy week with a 3.6% fall on Friday, closing at 4,131.93, its lowest finish since May 19, 2021. That leaves it down 10.8% from its close at 4,631.60 set on March 29, which was the day it left a correction it had entered in late February.
A correction is commonly defined as a pullback of at least 10% — but not more than 20% — from a recent peak. A correction is exited after rise of at least 10% from a correction low.
The S&P 500 fell back into correction just 22 trading days after leaving the previous one, its fastest re-entry since November 2008, during the turmoil of the 2007-2009 financial crisis, when the index fell back into correction only 7 trading days after leaving one. It later fell into a bear market.
The S&P 500 previously suffered a correction on Feb. 22, when it closed at 4,304.76, down 10.25% from its early January record close. Stocks extended a slide in early March as investors reacted to Russia’s Feb. 24 invasion of Ukraine, which sent oil prices soaring to nearly 14-year highs and stoked geopolitical anxiety.
A closing low of 4,170.70 on March 8 marked the bottom of that move.
Stocks slumped anew in volatile April trade, marked by large daily and intraday swings. The Dow Jones Industrial Average DJIA, -2.77% plunged 4.9% in April, while the S&P 500 shed 8.8% and the Nasdaq Composite COMP, -4.17% tumbled 13.3%. It was the biggest monthly percentage declines since March 2020 for the Dow and S&P, and the largest for the Nasdaq since October 2008.
It was the worst April performance for the Dow and S&P 500 since 1970, and the biggest April drop for the Nasdaq since 2000.
Stocks fell as investors digested mixed results from formerly highflying tech companies. They also adjusted expectations around the Federal Reserve and the prospect of a series of outsize rate increases and an aggressive wind-down of the central bank’s balance sheet as it attempts to rein in inflation running at its hottest in more than 40 years.