A market is said to be in a bear market when prices continue to drop over time. Typically, it refers to a scenario in which widespread pessimism and unfavorable investor sentiment cause securities values to decline by 20% or more from recent highs.

 

Bear markets are frequently connected with drops in an entire market or index like the S&P 500, but individual stocks or commodities can also be categorized as being in a bear market if they suffer a decline of 20% or more over a prolonged period of time, usually two months or more.

 

Bear markets can also occur in conjunction with broader economic downturns like a recession.

Bull markets that are moving upward can be contrasted with bear markets.