NEW YORK, March 13 (Reuters) -

For the first time in over a year, the U.S. stock market is

in a correction. The question now is whether the slide is set to

get worse.

The benchmark stock index closed down more than 10% from its

February 19 closing high, meeting the widely used definition of

a correction. The S&P 500's slide follows a similar drop for the

tech-heavy Nasdaq Composite index, which last week

confirmed it was in a correction.

The S&P 500's decline translates to a loss of about $5

trillion in market value from the February highs and marks a

sharp about-face in sentiment from the start of the year when

Wall Street was largely cheering much of Trump's agenda. The

index last marked a correction in late 2023.

Here is a look at how markets have fared, and what could lie

in store for investors.

MARKET CORRECTIONS

Stock market corrections are fairly common, with the S&P 500

logging a correction 56 times since 1929, according to a Reuters

analysis of data from Yardeni Research.

Of these, only 22 morphed into bear markets, defined as a

fall of 20% or more from most recent record highs, the data

showed.

Corrections, if they do not turn into a bear market, do much

less damage to markets.

Since 1929, corrections on average resulted in an average

peak to trough decline of 13.8%, as opposed to an average

decline of 35.6% during bear markets, the data showed.

Still, investors can take their time piling back into

stocks. The average correction lasts 115 days, Yardeni Research

showed. The current correction has lasted 22 days so far.

TARIFF TROUBLE

The Trump administration's back-and-forth tariff moves

against major trading partners like Canada, Mexico and China

have played a key role in dampening investors' appetite for

riskier assets.

Investors and analysts worry that escalating trade tension

could fan inflationary pressures and potentially stall economic

growth, raising the specter of a recession.

Uncertainty over tariffs has rattled investor nerves and

sparked worries that the so called "Trump put" - the idea that

counts on the president doing whatever it takes to keep the

stock market happy - has gone missing.

HAVEN HUNT

Investors have reached for a variety of traditional safe

havens in preparation for further market turmoil.

The yen, long considered a safe haven due to Japan's large

net foreign asset holdings and historically low interest rates,

has risen 6.5% this year, amid a broad-based selloff in the

dollar.

The price of gold, considered a hedge against uncertainties,

hit a record high on Thursday, having climbed more than 13% for

the year.

Increasing risk that the U.S. economy will stall has sent

investors seeking the safety of U.S. Treasuries. The rally in

bond prices has sent benchmark 10-year yields, which move

inversely to bond prices, to 4.296%, down about 50 basis points

since mid January.

Even within stocks, investors have gravitated toward

less risky parts of the market, with the S&P 500 Healthcare and

Consumer Staples sectors up 4.5% and 1.3% for the

year, respectively.

UNCERTAIN TIMES

Rapidly evolving policy has increased uncertainty for

businesses, consumers and investors, prompting a surge in

caution.

The U.S. Economic Policy Uncertainty Index, which analyzes

newspaper articles with keywords related to economic and policy

uncertainty, along with tax code changes and other economic

data, recently jumped to its highest since July 2024.

Higher policy uncertainty bodes ill not just for the stock

market, but also for business investments and for consumer

spending.

On Monday, Delta Air Lines ( DAL ), slashed its

first-quarter profit estimates by half, and its CEO said the

environment had weakened due to U.S. economic uncertainty.

BEARS ROAR

Individual investor pessimism over the short-term outlook

for U.S. stocks is at a more than two-year high in the latest

American Association of Individual Investors (AAII) Sentiment

Survey.

The change in sentiment has been accompanied by

institutional investors slashing equity allocations. Investors'

equity positioning dipped to slightly underweight for the first

time since briefly hitting that level in August, Deutsche Bank

analysts said in a note on Friday.

Meanwhile, the Cboe Volatility Index, an options

based measure of investor demand for protection against market

declines has jumped to a 7-month high of 29.57, compared with

its long-term median reading of 17.6.

WHAT GOES UP...

The "Magnificent Seven" stocks, which for the better part of

the last two years led the market's gains, have largely

struggled in 2025.

With investors becoming more risk-averse, seeking safer

investments, these tech and growth giants have experienced

declines exceeding those of the broader market.

The average "Mag 7" stock is down about 17% since the

S&P 500 peaked on February 19, with Tesla down about 33%.

With investors reducing their exposure to these once

high-flying stocks, this correction could prompt a change in

market leadership to other sectors.