Financial Markets Topical Guide

Wall Street entered a bear market on June 13 as the S&P 500 sank 3.9%, bringing it more than 20% below the record high of 4,796.56 set on Jan. 3, 2022. Rising interest rates, high inflation, the war in Ukraine and a slowdown in China's economy have caused investors to reconsider the prices they're willing to pay for a wide range of stocks, from high-flying tech companies to traditional automakers.

The Associated Press has compiled an editorial style guide of essential terms, spellings and definitions, and some key background. In addition, the AP produces occasional guides to localizing major national or international stories. Excerpts from the current localization guide are at the bottom.

bear market

A period of generally declining stock prices over a prolonged period, generally defined as a 20% or larger decline in broad stock indexes such as the S&P 500. The most recent bear market for the S&P 500 before June 13 ran from Feb. 19, 2020, through March 23, 2020, and was the shortest on record. The previous bear market stretched from October 2007 to March 2009, after the housing bubble burst.

The S&P 500, the basis of many index funds, is the stock market benchmark most closely watched by professional investors and market experts. Fears about a fragile economy and stubbornly high inflation slammed the stock market in recent days and sent Treasury yields surging to their highest levels in years. A report on June 10 that inflation was getting worse, not better as many had hoped, sent a chill through markets.

The S&P 500 has come back from every one of its prior bear markets to eventually rise to another all-time high. The down decade for the stock market following the 2000 bursting of the dot-com bubble was a notoriously brutal stretch, but stocks have often been able to regain their highs within a few years.

On average, bear markets have taken 13 months to go from peak to trough and 27 months to get back to breakeven since World War II. The S&P 500 index has fallen an average of 33% during bear markets in that time. The biggest decline since 1945 occurred in the 2007-2009 bear market when the S&P 500 fell 57%.

The longest bear market lasted 61 months and ended in March 1942 and cut the index by 60%.

What has contributed to the bear market?

Most of this year's damage on Wall Street has been the result of the Federal Reserve's aggressive shift away from doing everything it can to prop up financial markets and the economy.

The central bank has already raised its key short-term interest rate from its record low near zero, where it sat for nearly all the pandemic. And the Fed has signaled additional increases of double the usual amount are possible in upcoming months as it attempts to stamp out the high inflation sweeping the economy.

The moves by design will slow the economy by making it more expensive to borrow.

The risk is the Fed could cause a recession if it raises rates too high or too quickly. In the meantime, higher rates discourage investors from paying very high prices for investments, because investors can get a better return from owning super-safe Treasury bonds than they could just a few weeks ago.

More recently, big earnings misses by major retailers have stoked investors' fears that surging inflation could cut deeply into corporate earnings, a key driver of stock prices.

Why is it called a bear market?

Bears hibernate, so bears represent a market that's retreating, said Sam Stovall, chief investment strategist at CFRA. In contrast, Wall Street's nickname for a surging stock market is a bull market, because bulls charge, Stovall said.

bull market

A period of generally rising stock prices over a prolonged period, generally defined as a 20% or larger increase in broad stock indexes such as the S&P 500. Experts consider March 2020 as the beginning of a bull market.


A correction happens when a stock, bond, commodity or index declines 10% from a recent peak. Most market watchers wait until the market has closed for the day before declaring that an index or other measure has officially entered a correction. Corrections are common during bull markets, and are considered normal and even healthy. They allow markets to remove speculative froth after a big run-up and give investors a chance to buy stocks at lower prices. During the record 11-year bull market that started in March 2009, the S&P 500 had five corrections, the last of which happened in late 2018.

cost of living

The amount of money needed to pay taxes and to buy the goods and services deemed necessary to make up a given standard of living, taking into account changes that may occur in tastes and buying patterns.

The term often is treated incorrectly as a synonym for the U.S. Consumer Price Index, which does not take taxes into account and measures only price changes, keeping the quantities constant over time.

Hyphenate when used as a compound modifier: The cost of living went up, but he did not receive a cost-of-living raise.


While there's no standard definition, a crash can be a sudden, dramatic decline in stock, bond or commodities prices, as in 1987. A crash can also occur over a longer period, with a succession of sharp declines, as in the market crash of 1929. Market declines in crashes are faster and deeper than in corrections. In spring of 2020 the price of oil crashed as the COVID-19 pandemic sapped demand and producers failed to sufficiently rein in production, leading to an oversupply of crude.

dead cat bounce

A temporary recovery in share prices after a substantial fall, caused by speculators buying in order to cover their positions.

Dow Jones Industrial Average

The market indicator comprises 30 leading U.S. stocks. The average is calculated and published by S&P Dow Jones Indices LLC, which is jointly owned by S&P Global Inc. and CME Group Inc. The average is maintained by S&P Dow Jones Indices' averages committee, comprising representatives of S&P Dow Jones Indices and The Wall Street Journal. Always use the full name on first reference in stories. On subsequent references, use the Dow. The Dow is also acceptable in summaries and headlines.


Use a hyphen in all e- words except email and esports: e-book, e-reader, e-commerce.

Federal Reserve

The central bank of the United States. It comprises the Federal Open Market Committee, which sets interest rates; the Federal Reserve Board, the regulatory body made up of Fed governors in Washington; and the Federal Reserve System, which includes the Fed in Washington and 12 regional Fed banks. Use Federal Reserve on first reference, the Fed on second reference.

furlough versus layoff (n.) lay off (v.)

When workers are furloughed, they are let go by an employer but are considered on a leave of absence and sometimes remain eligible for benefits such as health insurance. Employees who are laid off are considered permanently let go. Both categories of workers are eligible for unemployment benefits.

gross domestic product

A common measure of economic growth, reflecting the total value of goods and services produced in a country. Economists often refer to the GDP. Spell it out on first reference and define it in the story for clarity.


A sustained increase in prices. The result is a decrease in the purchasing power of money. There are two basic types of inflation:

Cost-push inflation occurs when increases in the price of specific items, such as oil or food, are big enough to drive up prices overall.

Demand-pull inflation occurs when the amount of money available exceeds the amount of goods and services available for sale.

National Bureau of Economic Research

A nonprofit research organization. Its Business Cycle Dating Committee monitors the U.S. business cycle for economic activity to identify recessions and expansions after the fact, based on economic data. That means there is not an official declaration of recession while it is happening.

Nasdaq composite

A major U.S. stock index, often referred to in conjunction with the Dow Jones Industrial Average and the S&P 500 index. The Nasdaq composite is an index of all the stocks listed on the Nasdaq Stock Market. On second reference: the Nasdaq.

Nasdaq Stock Market

The world's first all-electronic stock market and a direct competitor to the New York Stock Exchange. Parent company is Nasdaq Inc.

percent, percentage, percentage points

Use the % sign when paired with a numeral, with no space, in most cases: The S&P 500 future contract was down 3.2% and the future for the Dow dropped 3.3%.

In casual uses, use words rather than figures and numbers: She said he has a zero percent chance of winning.

At the start of a sentence: Try to avoid this construction. If it's necessary to start a sentence with a percentage, spell out both: Eighty-nine percent of sentences don't have to begin with a number.

Constructions with the % sign take a singular verb when standing alone or when a singular word follows an of construction: The teacher said 60% was a failing grade. He said 50% of the membership was there.

It takes a plural verb when a plural word follows an of construction: He said 50% of the members were there.

Use decimals, not fractions, in percentages: Her mortgage rate is 4.5%.

For a range, 12% to 15%, 12%-15% and between 12% and 15% are all acceptable.

Use percentage, rather than percent, when not paired with a number: The percentage of people agreeing is small.

Be careful not to confuse percent with percentage point. A change from 10% to 13% is a rise of 3 percentage points. This is not equal to a 3% change; rather, it's a 30% increase.

Usage: Republicans passed a 0.25 percentage point tax cut. Not: Republicans passed a 0.25 percentage points tax cut or Republicans passed a tax cut of 0.25 of a percentage point.

prime rate

A benchmark rate used by banks to set interest charges on a variety of corporate and consumer loans, including some adjustable home mortgages, revolving credit cards and business loans extended to their most creditworthy customers. Banks almost always raise or lower their rates by a similar amount on the same day Federal Reserve policymakers change their target for overnight loans between banks, known as the federal funds rate.

producer price index

An index of changes in wholesale prices, produced by the Bureau of Labor Statistics, U.S. Department of Labor, and used as a gauge of inflation. Spell the index name lowercase.

recession, depression

A recession is a falling-off of economic activity that may be a temporary phenomenon or could continue into a depression. A common definition is two straight quarters of economic contraction. A more official determination is made by the National Bureau of Economic Research, which considers a range of indicators in declaring a recession. The bureau's determination is typically made well after a recession has begun and sometimes after it has ended.

There is no agreed-upon definition of a depression. During the Great Depression of the 1930s, unemployment peaked at 25% and the stock market lost 90% of its value from boom to bust. Today, there are safeguards in place that didn't exist in the 1930s: deposit insurance, unemployment benefits and the ability of the government to spend trillions of dollars to bolster the economy.

Great Recession

The recession that began in December 2007 and became the longest and deepest since the Great Depression of the 1930s. It occurred after losses on subprime mortgages battered the U.S. housing market and financial system. The National Bureau of Economic Research said it officially ended in June 2009, having lasted 18 months.


A sell-off is the rapid selling of securities such as stocks, bonds or commodities. A sell-off can occur in an individual security – a company's stock, the 10-year Treasury note, crude oil futures – or in a broader market. A minor sell-off is called a pullback.

S&P 500

The market indicator most professional investors use to determine how stocks are performing. It encompasses 500 top companies in leading U.S. industries. Many mutual funds use it as the benchmark they measure their own performance against.

shelter in place (v.), shelter-in-place (adj.)

The governor urged residents to shelter in place. Authorities issued a shelter-in-place order. Spell out what is meant, because people's definitions and interpretations vary.

stay at home (v.), stay-at-home (adj.)

shutdown (n.), shut down (v.)

unemployment rate

In the United States, this estimate of the number of unemployed residents seeking work is compiled monthly by the Bureau of Labor Statistics, an agency of the Labor Department.

Each month the bureau selects a cross section of the population and conducts interviews to determine the size of the U.S. workforce. The workforce is defined as the number of people who either have a job or are looking for one. The unemployment rate is expressed as a percentage: the proportion of the workforce that is out of work and looking for a job, adjusted to reflect variable factors such as seasonal trends.

The unemployment rate does not count people who are not looking for work, whether that is because they have given up, they are ill or they are caring for a family member. Nor does it count people who lost a full-time job and took a part-time job while they continue to look for full-time work. When workers are jobless for 27 weeks or more and have actively sought employment during the previous four weeks, the Bureau of Labor Statistics classifies it as long-term unemployment

401(k) plan

A type of tax-free retirement savings account. Money in the account is invested in a variety of assets including stocks, according to options chosen by the account holder.


The steep declines mean Americans who invested in the stock market, whether on their own or through a work sponsored retirement account, have likely seen the value of their stock portfolios shrink quite a bit.

— A key question to explore: How are local investors coping and reacting to the Wall Street sell-off? It's likely that the answers to that will depend largely on whether they are older Americans, rather than investors in their 20s and 30s. How are investors near retirement and retirees already making withdrawals from their retirement portfolio holding up? Are they rebalancing their stock portfolio? Are they pulling out now before it gets worse? Or "buying the dip" and picking up big name stocks like Apple that are a lot less expensive than they were earlier this year?

— Younger investors who are mainly trying to grow a nest egg for when they retire are likely not as worried, nor are they perhaps making big changes. However, as many have come of age during a bull market that ran for over a decade (2009-2020), perhaps they're motivated to cut their losses?

— Have investors come to see market downturns as something they can ride out, given how strongly and quickly the market has bounced back from bear markets in recent years? If so, there could be colorful anecdotes to be found among investors who are not worried at all about the market's ups and downs.

— Similarly to a strong housing market, when stocks are climbing investors can't help but feel more financially secure, even if the gains are all on paper. This wealth effect can make people more eager to spend money. The question here is, what's the impact on local businesses, if any, as the stock market losses pile up. Fewer customers? Canceled orders?

— So-called retail investors helped push up stock prices the last couple of years. A story could focus on where the sell-off has left these novice investors, especially those who bought into cryptocurrencies and meme stocks, which soared in 2021 but are now in a slump with the rest of the market.

— Consider your city's demographics. Areas with retirement communities, including some "active adult" developments for people 55 and over, could be worth exploring to connect with investors who are retired or just a few years away. How has the stock market slump affected their plans for vacations? Are they having trouble making ends meet?

— It may be worthwhile to reach out to someone who is not an investor and gauge what's kept them from making a long-term bet on Wall Street's track record for steady gains over time. Perhaps they can't afford to invest or don't trust buying shares in a company. Are they happy to have presumably avoided the kind of hefty losses that many 401k plans have sustained this year?

— That said, don't be surprised if many people aren't eager to talk about money, especially if they racked up losses. You may have better luck searching online investor forums, like those on Reddit, or individual investors on Twitter or Facebook who make a habit of disclosing their stock trades, sometimes even posting screenshots of their holdings right from their stock trading app.

— Connect with a stock market expert who can frame how not participating in the stock market has hurt some households.

— Individual investors aren't the only ones who stand to make big money or lose their shirt in the stock market. Public employee pension funds, like those many state teachers unions have, can help illustrate the opportunity and potential downsides to investing in stocks. Leading up to the Great Recession, some high-profile state public union pension funds lost billions betting on mortgage-backed securities, for example.

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