A bear market and a market correction are both terms used to describe declines in financial markets, but they differ in magnitude, duration, and implications.

A bear market is characterized by a prolonged period of falling stock prices, typically defined as a decline of 20% or more from recent highs. Bear markets often reflect widespread pessimism and negative investor sentiment, lasting for months or even years. They are usually associated with broader economic downturns, such as recessions, and can be triggered by factors like high inflation, rising interest rates, geopolitical tensions, or systemic financial problems. During a bear market, investors may experience significant losses, and the overall market environment tends to be volatile and challenging.

On the other hand, a market correction is a shorter-term decline, generally defined as a drop of 10% to 20% from recent highs. Corrections occur more frequently and are seen as a normal part of market cycles. They typically last for a few weeks to a few months and often serve to adjust overvalued prices, allowing the market to consolidate before resuming an upward trend. Corrections can be triggered by various factors, such as profit-taking, economic data releases, or geopolitical events, but they do not usually indicate severe economic issues.

While both a bear market and a market correction involve declines in stock prices, a bear market is more severe, longer-lasting, and often associated with economic downturns, whereas a market correction is a shorter-term, less severe adjustment within an overall upward trend.