Corrections of this length are extremely unusual. According to the data, of the past 20 corrections (including the ongoing one), only two lasted longer than 100 trading sessions. The average length is about 46 trading sessions.
Based on their Friday closing levels, the Dow would need to rise about 8.8% to hit a new record and exit correction territory, while the S&P 500 would need to gain 5.4%.
For global financial markets, the second quarter of 2018 can be summed up in one word: volatility.
Almost every asset class, sector, and region saw steep swings over the past three months, as market participants reacted to a shifting investment landscape that seemed to change by the day. Much of the moves, both up and down, were driven by trade policy, as tensions between the U.S. and its major trading partners seemed to escalate, although it was often unclear whether the most extreme threats of tariffs and retaliation represented just the opening salvo of negotiations, or whether they were likely to occur at all.
Despite most segments ending in the green for the quarter, the period included heavy periods of back-and-forth action. In a sign of how uncertain the environment has become — with growing concerns that the economy is in the late stage of its economic cycle, and fewer fund managers expecting growth to improve from here, although these factors have been offset by improving corporate profits and a strong labor market — both the Dow and the S&P 500 have traded in a tight range for months.
In contrast, two other indexes — the Nasdaq and the Russell 2000 — extended their push to record levels. The Nasdaq was supported as major technology and internet stocks continued to outperform, albeit with heavy trade-related volatility of their own, while the Russell benefited from the heavier domestic revenue exposure of its components, which insulated them from both currency headwinds and the threat of a trade war.