Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Market Swoon

What it is:

A market swoon is an abrupt fall in the value of a market index.

How it works (Example):

Derived from a term meaning "to faint" or "pass out," market swoon is a vernacular expression that describes a sudden and widespread loss in the value of stocks across an entire market.

A market swoon is generally characterized by a substantial interruption in trading combined with a high trading volume. An example of a market swoon would be a steep decline in the value of the S&P 500 Index.

Why it Matters:

Market swoons frequently occur in response to economic or political shocks (for example, interest rate increases and international conflicts). The market often recovers from a market swoon in a relatively short span of time.