The Russell 2000 Index, which measures the performance of small-cap stocks, ended Thursday down more than 20% from its recent peak, meeting the commonly used definition of a bear market.
The RUT index,
which closed at a record high of 2,442.742 on November 8, ended about 21% off its high on Thursday, marking its first bear market since March 9, 2020. The index was expected to avoid a close at or below 1,954 .19 to avoid a bear market, but selling pressure pushed the index deep into the red.
The index led the way during the last stock market downturn in 2020 as the COVID pandemic took hold in the United States. The benchmark is often seen as a sector of the market that tends to be more sensitive to concerns about economic growth, rising inflation, and bullishness. interest rates, all the conditions the economy is experiencing or is likely to experience in the coming months as the US Federal Reserve sets the stage for a series of rate hikes starting in March.
After the Russell 2000 Index entered a bear market in early March, the Dow Jones Industrial Average DJIA,
closed in a bear market on March 11. The S&P 500 SPX,
and Nasdaq Composite COMP,
entered bear markets a day later.
Flash forward to 2022 and the Nasdaq Composite is already in a correction, defined as a decline of at least 10% (but no more than 20%) from its November 19 high. The index is about 17% off its November peak and the S&P 500 is about 10 points from a correction, as of Thursday’s close.