It's been a tough year for stocks — and it's only getting worse.
The S&P 500 index recovered at the close of markets on Friday after briefly dipping into bear market territory earlier in the day. It closed the day little-changed from the open, but finished the week down nearly 3 percent — the seventh-straight week of declines. That caps off the worst run since 2001, according to Bloomberg data.
The Dow Jones Industrial Average also closed the week down about 3 percent, and has now seen declines for eight straight weeks. It's the first time that has happened since 1923, CNBC reported.
The sell-offs have been sparked in part by the Federal Reserve's decision to raise its key interest rate, making it more expensive to borrow and thus restricting the overall financing environment.
The rout has only accelerated as inflation hovers at 40-year highs and as the Federal Reserve pursues its monetary tightening measures.
Wednesday, stocks saw their worst single-day decline in years, after the retailer Target reported revenues and profits that were worse than analysts' expectations. Shares in other retail companies like Walmart dipped as well.
"The sharp sell-off in these companies (as well as other goods/consumer companies this quarter) shows that inflationary pressures are finally having an impact on earnings," Maneesh S. Deshpande, head of U.S. equity strategy at Barclays, said in a Thursday note.
The Dow Jones Industrial Average, which includes 30 prominent and mostly mature U.S. companies, is about 13 percent below its most recent peak, so it has a bit more room to run before it enters a bear market.
But the Nasdaq composite index, which is heavy on technology companies, is already in a bear market. It entered one in March, after hitting a high in November. A bear market occurs when a stock index declines 20 percent or more from its most recent high.
For the S&P 500 index — which includes major companies like Amazon, Apple, Bank of America and Walmart and is most often used as a proxy for the broader stock market — the most recent high happened on Jan. 3.
Altogether, it is no longer clear whether companies will be able to maintain healthy sales margins, and thus profitability, in the near term, Deshpande said.
Analysts say that, for now, long-term stock holders don't need to panic about selling, even if the declines continue.
"I always advise against timing the market because you have to be right twice," said Sam Stovall, chief investment strategist at CFRA research group. "You have to be right when you get out — and usually people are correct on getting out — but you rarely see people be correct on when to get back in."
The most recent bear market, in 2020, lasted about a month. Before that, in 2009, the S&P 500 fell into a bear market that lasted about two months. Other bear markets, including ones beginning in 2007, 2000 and 1980, lasted more than a year.
However, there are signs this one could last longer, which means investors may have to think about how severe of a loss they can withstand.
"We have more downside likely as this adjustment process continues to unfold," said Scott Ladner, CIO at Horizon Investments financial group. "So if you need money in the next three months, maybe take your lumps and get out. But past that, we have a chance for earnings to find their steady state."