AI Challenges Bear Market Definition as SOX and KOSPI Fall Over 20% but Remain Strongly Positive
Price Action
Wall Street is beginning to question the traditional criteria for defining a bear market, after the SOX and KOSPI indices fell more than 20% from their peaks, yet at their lowest points they remain up 46% and 25% from the start of the year. Amid the AI-driven volatility in technology stocks, strategists such as Art Hogan of B. Riley Wealth and Steve Sosnick of Interactive Brokers point out that using a 20% decline threshold alone may not be appropriate for indices that have previously surged. Data from Hartford Funds indicates that the average S&P 500 bear market lasts 289 days, while LSEG expects semiconductor earnings in the S&P 500 to grow 114.7% this year. Analysts suggest considering other factors such as duration, volatility, and fundamentals. Sosnick recommends that the SOX would need to fall more than 44% to be considered a bear market.
