Market factPublished · S&P 500 and FRED to Nov 6, 2026

After a 10% drop, the next year was normal. Unless a recession followed

In 24 corrections since 1950, the S&P 500’s median return over the next 12 months was 11.8%, about the same as from any month. With a recession, 7 in 10 became bear markets; without one, 3 in 10.

Median next 12 months after a 10% drop
+11.8%
Became a bear market, recession
70%
Became a bear market, none
29%
Next year, recession
−8.7%
Next year, none
+14.2%

What we found

The S&P 500 first closed 10% below a record 24 times since 1950. Over the next 12 months the median return was +11.8%, against +10.8% from any month, and it was higher a year later two times in three.

What decided it was the economy. Of the 10 corrections that came with an NBER recession, 7 went on to a 20% bear market, the median next year was −8.7% and the median deepest fall 31%. Of the 14 without one, 4 became bear markets, the median next year was +14.2% and the median deepest fall 17%.

The S&P 500’s return over the 12 months after each of 24 corrections since 1950, coloured by whether a recession followed, with most losses coming with recessions; beside it, the share that became a 20% bear market: 70% with a recession, 29% without.

The full results

After a 10% correction, S&P 500 since 1950
GroupCorrectionsBecame a 20% bear marketMedian next 12 monthsMedian deepest fall
With a recession1070%−8.7%−31%
Without1429%+14.2%−17%
All2446%+11.8%—

Any month’s next 12 months since 1950: median +10.8%. Prices only.

The 12 months after each 10% drop
  • Recession
  • No recession
−40%−20%0%+20%+40%1955 · No recession: +15%1956 · Recession: −9%1960 · Recession: +17%1962 · No recession: +7%1966 · No recession: +10%1968 · No recession: +14%1969 · Recession: −21%1973 · Recession: −16%1981 · Recession: −8%1984 · No recession: +18%1987 · No recession: −8%1990 · Recession: +6%1990 · Recession: +18%1997 · No recession: +21%1998 · No recession: +25%1999 · No recession: +13%2000 · Recession: −13%2007 · Recession: −37%2015 · No recession: +15%2018 · No recession: +5%2018 · No recession: +18%2020 · Recession: +28%2022 · No recession: −7%2025 · No recession: +20%195519561960196219661968196919731981198419871990199019971998199920002007201520182018202020222025
The deepest fall from the record
  • Recession
  • No recession
−60%−40%−20%0%1955 · No recession: −11%1956 · Recession: −21%1960 · Recession: −14%1962 · No recession: −28%1966 · No recession: −22%1968 · No recession: −10%1969 · Recession: −36%1973 · Recession: −48%1981 · Recession: −27%1984 · No recession: −14%1987 · No recession: −34%1990 · Recession: −10%1990 · Recession: −20%1997 · No recession: −11%1998 · No recession: −19%1999 · No recession: −12%2000 · Recession: −49%2007 · Recession: −57%2015 · No recession: −14%2018 · No recession: −10%2018 · No recession: −20%2020 · Recession: −34%2022 · No recession: −25%2025 · No recession: −19%195519561960196219661968196919731981198419871990199019971998199920002007201520182018202020222025
Every correction (24 rows)
First close 10% downRecord beforeNext 12 monthsDeepest fallRecessionMonths to a new record
10.11.195509.23.1955+14.7%−11%No1
11.21.195608.02.1956−9.4%−21%Yes22
03.04.196008.03.1959+17.2%−14%Yes11
04.30.196212.12.1961+7.0%−28%No16
05.16.196602.09.1966+10.3%−22%No12
03.05.196809.25.1967+13.7%−10%No2
06.19.196911.29.1968−20.8%−36%Yes33
04.27.197301.11.1973−15.9%−48%Yes87
08.24.198111.28.1980−8.1%−27%Yes14
02.13.198410.10.1983+18.3%−14%No11
10.15.198708.25.1987−7.6%−34%No21
01.30.199010.09.1989+5.6%−10%Yes4
08.17.199007.16.1990+17.6%−20%Yes6
10.27.199710.07.1997+21.5%−11%No1
08.14.199807.17.1998+24.9%−19%No3
09.29.199907.16.1999+13.3%−12%No2
04.14.200003.24.2000−12.8%−49%Yes85
11.26.200710.09.2007−36.9%−57%Yes64
08.24.201505.21.2015+14.9%−14%No11
02.08.201801.26.2018+4.9%−10%No6
11.23.201809.20.2018+18.1%−20%No5
02.27.202002.19.2020+27.9%−34%Yes6
02.22.202201.03.2022−7.3%−25%No23
03.13.202502.19.2025+20.1%−19%No3

Recession: an NBER recession month between the month before the record and 12 months after the drop.

Why the economy decides

Most corrections are about sentiment, rates or a scare that passes, and the market recovers: without a recession, the median deepest fall was 17% and the median next year +14.2%. Corrections that came with a recession were about falling profits, and those went deeper and lasted longer, with a median deepest fall of 31%.

NBER dates recessions after the fact, so this split is clear only in hindsight. The signals that warned in real time, such as the Sahm rule and the yield curve, are on the /macro page.

How it was measured

  • S&P 500 index (^GSPC) daily closes, prices without dividends. A correction counts once, from its first close 10% below the record until a new record.
  • With a recession: an NBER recession month from the month before the record to 12 months after the drop.

Caveats

  • NBER announces recessions months after they start, so the split is clear only in hindsight. Real-time recession signals, such as the Sahm rule and the yield curve, are on the /macro page.
  • Only 24 corrections, so the percentages are rough.

Questions

What happens after a 10% correction?
Usually a normal year. After the S&P 500 first closed 10% below a record, the median return over the next 12 months was +11.8% since 1950, against +10.8% from any month.
How often does a correction become a bear market?
About half the time: 11 of 24 since 1950. With a recession, 7 of 10 did; without one, 4 of 14.

More research

All research →

Historical analysis. Past performance does not guarantee future results. Not investment advice. Published Nov 2026. Data: S&P 500 and FRED to Nov 6, 2026.