S&P 500 falls 20% from record close, on pace to confirm bear market

US stocks continued their slide toward a bear market, with the S&P 500 dipping 20% below its Jan. 3 closing record. Treasuries and the dollar gained as havens caught bids.

The benchmark lost 1.6% in afternoon trading. A close at that level would meet the common definition for a bear market. At the end of another volatile week, price swings are likely to be exacerbated by the monthly expiration of options tied to equities and exchange-traded funds. 

The S&P 500 is headed for its seventh weekly decline that would make the longest losing streak since the dotcom bubble burst more than two decades ago. It will be just its fourth streak of seven or more weekly losses in the post-World War II period, according to Bespoke Investment Group.

“It’s a small sample size, but these types of streaks haven’t occurred during particularly positive periods for the equity market,” wrote the firm’s strategists in a note. “The root causes of the weakness have been the hawkish FOMC and increasing concerns over the potential for a recession.”

A close of more than 20% below the all-time closing high of Jan. 3 would confirm the index was in a bear market for the first time since the 2020 Wall Street plunge brought on by the COVID-19 pandemic.