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Do Recessions Always Follow Major Stock Market Downturns? Usually

4,000

BEAR

MARKETS

1,000

S&P 500

100

10

1

1945

1950

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1970

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2010

2020

4,000

BEAR

MARKETS

1,000

S&P 500

100

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1

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2020

4,000

BEAR

MARKETS

1,000

S&P 500

100

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1

1950

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4,000

RECESSIONS

1,000

S&P 500

100

10

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2020

4,000

RECESSIONS

1,000

S&P 500

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4,000

RECESSIONS

1,000

S&P 500

100

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4,000

BEAR

MARKETS

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S&P 500

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RECESSIONS

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1

1945

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2020

4,000

BEAR

MARKETS

1,000

S&P 500

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RECESSIONS

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1

1945

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4,000

BEAR

MARKETS

1,000

S&P 500

100

RECESSIONS

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4,000

BEAR

MARKETS

1,000

S&P 500

100

RECESSIONS

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1

1945

1950

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2020

4,000

BEAR

MARKETS

1,000

S&P 500

100

RECESSIONS

10

1

1945

1950

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4,000

BEAR

MARKETS

1,000

S&P 500

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RECESSIONS

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1

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4,000

BEAR

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1,000

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4,000

BEAR

MARKETS

1,000

S&P 500

100

RECESSIONS

10

1

1945

1950

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4,000

BEAR

MARKETS

1,000

S&P 500

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RECESSIONS

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4,000

BEAR

MARKETS

1,000

S&P 500

100

RECESSIONS

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1

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4,000

BEAR

MARKETS

1,000

S&P 500

100

RECESSIONS

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1

1945

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4,000

BEAR

MARKETS

1,000

S&P 500

100

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4,000

BEAR

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RECESSIONS

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1

1945

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4,000

BEAR

MARKETS

1,000

S&P 500

100

RECESSIONS

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1

1945

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4,000

BEAR

MARKETS

1,000

S&P 500

100

RECESSIONS

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1

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4,000

BEAR

MARKETS

1,000

S&P 500

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RECESSIONS

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1

1945

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4,000

BEAR

MARKETS

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S&P 500

100

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4,000

BEAR

MARKETS

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S&P 500

100

RECESSIONS

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4,000

BEAR

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1,000

S&P 500

100

RECESSIONS

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1

1945

1950

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4,000

BEAR

MARKETS

1,000

S&P 500

100

RECESSIONS

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1

1945

1950

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BEAR

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2020

Since World War II, the S&P 500 has entered a bear market — a drop of 20 percent from its peak — 12 times, including the one we are in.

There have been 12 recessions during the same time (not including the one we may be heading into).

However, not every bear market immediately preceded a recession.

The stock market isn’t an indicator of economic activity, and therefore isn’t necessarily a predictor of recessions. But steep declines in the stock market have often coincided with a downturn in the economy. Of the bear markets that came before the current one, three occurred without a recession afterward.

Stocks suffered their steepest single-day decline on Oct. 19, 1987 — what became known as Black Monday. Rising interest rates, tensions in the Middle East and concerns about the bulging trade deficit helped ignite the selloff, and a popular trading strategy without today’s safeguards exacerbated the declines. Despite the tumult, the economy continued to grow.

There were three bear markets in the 1960s, including two that did not precede recessions. The economy grew robustly for much of the decade, and interventions by the Federal Reserve to tame inflation helped cause two of the market declines.

In the early 2000s, stocks began to slide and the economy slowed as the dot-com bubble burst. Then came 9/11. The ensuing downturn lasted just eight months. But the Sept. 11 attacks “may have been an important factor in turning the episode into a recession,” the National Bureau of Economic Research said.

Less than a decade later, the financial crisis and bear market of 2008-9 helped produce the deepest recession in the American economy since the end of World War II.

Now, with uncertainty over the coronavirus, trillions have been lost in the markets. Businesses have closed their doors, scores of people are losing their jobs and even corporate giants like Boeing have sought government assistance. The ultimate impact remains unclear, but there have been increasing predictions that a recession may soon come.

Data as of 11:15 a.m. Wed. The vertical scale is adjusted in order to make percentage changes comparable.