MW What might happen next after the S&P 500's correction?
By Philip van Doorn
Also: Deeper looks at Microsoft, Tesla (and Musk) and ways to broaden your investment horizons and lower your risk
A correction for a stock index is typically defined as a decline of at least 10% from a recent high, while a bear market is a decline of at least 20%. The S&P 500 SPX slipped into correction territory on Thursday, when the index declined 1.4%, for a 10.1% pullback from its most recent closing high on Feb. 19.
Here is how the 11 sectors of the S&P 500 have performed this year and for longer periods through Thursday, with dividends reinvested. The table is sorted by this year's price returns, ascending, with the full index at the bottom.
Sector or index 2025 return 2024 return 2023 return 2022 return Return since end of 2021
Consumer Discretionary -15.5% 30.1% 42.4% -37.0% -1.4%
Information Technology -12.0% 36.6% 57.8% -28.2% 36.3%
Communication Services -5.2% 40.2% 55.8% -39.9% 24.6%
Industrials -2.3% 17.5% 18.1% -5.5% 28.2%
Financials -1.8% 30.6% 12.1% -10.5% 28.6%
Real Estate 0.0% 5.2% 12.4% -26.1% -12.7%
Materials 0.9% 0.0% 12.5% -12.3% -0.4%
Consumer Staples 1.6% 14.9% 0.5% -0.6% 16.5%
Energy 1.9% 5.7% -1.3% 65.7% 76.2%
Utilities 2.2% 23.4% -7.1% 1.6% 19.1%
Healthcare 4.6% 2.6% 2.1% -2.0% 7.4%
S&P 500 -5.9% 25.0% 26.3% -18.1% 21.7%
Source: FactSet
The table includes returns for the past three full years, and you can see returns from the end of 2021 through Thursday in the right-most column. The bull market of 2023 and 2024 might have caused some memories of the S&P 500's 18% decline in 2022 to fade.
Isabel Wang looked back at the long history of market corrections to analyze trends. Here is what history suggests could happen next in the broad U.S. stock market.
Joseph Adinolfi dug into technical factors and described six charts for investors to watch following the S&P 500's decline.
Early on Friday, Mark Hulbert shared an analysis indicating that the worst of the market decline may be over and looking at how quickly the S&P 500 might be expected to recover.
For contrarians looking to buy on the dip: These 13 growth stocks are expected to roar back from their declines so far this year
If the world is souring on U.S. stocks, think globally
Jonathan Burton interviewed Keith McCullough, the CEO of Hedgeye Risk Management, whose investment style encompasses all asset classes and global markets. He outlined his current allocation in light of the weakening of the dollar and uncertainty over President Donald Trump's trade policies. McCullough also listed exchange-traded funds investors can consider to take advantage of current opportunities and to limit risk.
More on shifting strategies in your investment portfolio:
-- This ETF plays defensively within growth stocks. Here's how it is faring better than the S&P 500.
-- This five-star all-weather ETF can lower your exposure to risky stocks and bonds
And for gold bugs: Gold tops $3,000. Here's what investors joining the gold rush need to know.
Has Tesla hit bottom?
Tesla Inc. $(TSLA)$ was the second-worst performer in the S&P 500 this year through Thursday, with shares declining 40%, just ahead of a 42% decline for Deckers Outdoor Corp. $(DECK)$.
Here is how the megacap tech stocks known as the Magnificent Seven have performed this year through Thursday, from best to worst.
Company Ticker 2025 return 2024 return 2023 return 2022 return Return since end of 2021
Meta Platforms Inc. META 1% 66% 194% -64% 76%
Microsoft Corp. MSFT -10% 13% 58% -28% 16%
Amazon.com Inc. AMZN -12% 44% 81% -50% 16%
Alphabet Inc. Class A GOOGL -14% 36% 58% -39% 13%
Nvidia Corp. NVDA -14% 171% 239% -50% 294%
Apple Inc. AAPL -16% 31% 49% -26% 20%
Tesla Inc. TSLA -40% 63% 102% -65% -32%
Source: FactSet
These seven stocks make up 30.6% of the SPDR S&P 500 ETF Trust SPY, which tracks the index by holding all of its stocks with a similar weighting to market capitalization. The cap weighting rewards success, but the concentration can also lead to higher declines during rough patches than those of less concentrated portfolios.
If you scroll the table to the right, you can see how the broad tech-driven decline in 2022 affected these stocks and how they have performed since the end of 2021.
And now investors might be wondering whether or not Tesla has hit a low point for this market cycle.
Lawrence McMillan analyzed options trading patterns for Tesla's stock and came to this conclusion.
Claudia Assis looked into the increasing number of listings by people trying to sell their Teslas and how owners of the electric vehicles are reacting to Tesla CEO Elon Musk's political activities.
More coverage of Tesla and Musk:
-- This could be Tesla's next plan to recoup China market share
-- LinkedIn co-founder has known Elon Musk for years. Here's what he says Americans don't understand about the Tesla CEO.
What about Microsoft?
Microsoft's stock is down 10% this year, and its forward price-to-earnings ratio has declined to 26.3 from 29.9 at the end of 2024. These are ratios of the share price to the rolling 12-month consensus earnings estimates among analysts polled by FactSet. Meanwhile the forward P/E for the S&P 500 has declined to a weighted 20.3 from 21.6 at the end of 2025.
The premium P/E valuation for Microsoft's stock might be justified by analysts' higher expectations for the company's growth. Based on consensus estimates, Microsoft's revenue is projected to increase at a compound annual growth rate of 13.7% from 2024 through 2026, compared with a projected sales CAGR of 6.1% for the S&P 500. And Microsoft's earnings per share is projected to have a CAGR of 14.6% from 2024 through 2026, compared with an EPS CAGR of 13.5% for the index. That last figure for the index is fascinating, as it bakes in expectations for continuing efficiency improvement across the board.
In the Ratings Game column, Therese Poletti shared thoughts from D.A. Davidson analyst Gil Luria, who expects Microsoft to outperform other tech giants going forward.
More Big Tech coverage:
-- Intel's stock is climbing. Here's the latest hope for a rescue.
-- Nvidia's stock is rebounding, but the key to a real recovery may surprise investors
A toughening economic picture for consumers
Venessa Wong and Jeffry Bartash reported on how it is becoming increasingly difficult for low- and middle-income consumers to afford living in the U.S. They did this by looking at economic numbers and by interviewing people about what they have been doing to manage their families' expenses.
Related coverage:
-- Tariffs could cost Americans an extra $1,600 a year. Here's where to find that money in your household budget.
-- Why student-loan borrowers 'are going to feel the brunt' of the Education Department layoffs
-- Economists thought Trump would try to prevent a recession. That's now in doubt.
-- Egg prices represent the cracks in the facade of America's economic wellbeing
How to make it easier to sell your house
If you are thinking about remodeling your home, one factor in your decision might be how appealing certain renovations will be to prospective buyers if you ever decide to move. Aarthi Swaminathan listed various renovations and the types of materials you can use, and highlighted the ones that may be most attractive to potential buyers in the current housing market.
More housing coverage from Aarthi Swaminathan:
-- Rocket-Redfin deal could make home buying more convenient - and more expensive
-- I'm 73 and own two rental properties in Florida. When is the best time to sell?
-- Americans are using this strategy to save money on home insurance. Is it a good idea?
News about companies and the activist investors who pressure them
Steve Gelsi researched the resurgent phenomenon of activist investors influencing the governance of large U.S. companies. Pressure to unlock value for investors can lead to significant changes, such as those announced this week by Southwest Airlines Co. $(LUV)$.
Viking Therapeutics Inc. $(VKTX)$ is trying to take on the giants in the GLP-1 weight-loss drug space - Eli Lilly & Co. $(LLY)$ and Novo Nordisk A/S $(NVO)$ - with an oral medication that would lower costs for patients who currently must inject their medications. Ciara Linnane reported on this week's important development for Viking that could help it bring its medication to market and remove an overhang for the stock.
MW What might happen next after the S&P 500's correction?
By Philip van Doorn
Also: Deeper looks at Microsoft, Tesla (and Musk) and ways to broaden your investment horizons and lower your risk
A correction for a stock index is typically defined as a decline of at least 10% from a recent high, while a bear market is a decline of at least 20%. The S&P 500 SPX slipped into correction territory on Thursday, when the index declined 1.4%, for a 10.1% pullback from its most recent closing high on Feb. 19.
Here is how the 11 sectors of the S&P 500 have performed this year and for longer periods through Thursday, with dividends reinvested. The table is sorted by this year's price returns, ascending, with the full index at the bottom.
Sector or index 2025 return 2024 return 2023 return 2022 return Return since end of 2021
Consumer Discretionary -15.5% 30.1% 42.4% -37.0% -1.4%
Information Technology -12.0% 36.6% 57.8% -28.2% 36.3%
Communication Services -5.2% 40.2% 55.8% -39.9% 24.6%
Industrials -2.3% 17.5% 18.1% -5.5% 28.2%
Financials -1.8% 30.6% 12.1% -10.5% 28.6%
Real Estate 0.0% 5.2% 12.4% -26.1% -12.7%
Materials 0.9% 0.0% 12.5% -12.3% -0.4%
Consumer Staples 1.6% 14.9% 0.5% -0.6% 16.5%
Energy 1.9% 5.7% -1.3% 65.7% 76.2%
Utilities 2.2% 23.4% -7.1% 1.6% 19.1%
Healthcare 4.6% 2.6% 2.1% -2.0% 7.4%
S&P 500 -5.9% 25.0% 26.3% -18.1% 21.7%
Source: FactSet
The table includes returns for the past three full years, and you can see returns from the end of 2021 through Thursday in the right-most column. The bull market of 2023 and 2024 might have caused some memories of the S&P 500's 18% decline in 2022 to fade.
Isabel Wang looked back at the long history of market corrections to analyze trends. Here is what history suggests could happen next in the broad U.S. stock market.
Joseph Adinolfi dug into technical factors and described six charts for investors to watch following the S&P 500's decline.
Early on Friday, Mark Hulbert shared an analysis indicating that the worst of the market decline may be over and looking at how quickly the S&P 500 might be expected to recover.
For contrarians looking to buy on the dip: These 13 growth stocks are expected to roar back from their declines so far this year
If the world is souring on U.S. stocks, think globally
Jonathan Burton interviewed Keith McCullough, the CEO of Hedgeye Risk Management, whose investment style encompasses all asset classes and global markets. He outlined his current allocation in light of the weakening of the dollar and uncertainty over President Donald Trump's trade policies. McCullough also listed exchange-traded funds investors can consider to take advantage of current opportunities and to limit risk.
More on shifting strategies in your investment portfolio:
-- This ETF plays defensively within growth stocks. Here's how it is faring better than the S&P 500.
-- This five-star all-weather ETF can lower your exposure to risky stocks and bonds
And for gold bugs: Gold tops $3,000. Here's what investors joining the gold rush need to know.
Has Tesla hit bottom?
Tesla Inc. $(TSLA.UK)$ was the second-worst performer in the S&P 500 this year through Thursday, with shares declining 40%, just ahead of a 42% decline for Deckers Outdoor Corp. (DECK).
Here is how the megacap tech stocks known as the Magnificent Seven have performed this year through Thursday, from best to worst.
Company Ticker 2025 return 2024 return 2023 return 2022 return Return since end of 2021
Meta Platforms Inc. META 1% 66% 194% -64% 76%
Microsoft Corp. MSFT -10% 13% 58% -28% 16%
Amazon.com Inc. AMZN -12% 44% 81% -50% 16%
Alphabet Inc. Class A GOOGL -14% 36% 58% -39% 13%
Nvidia Corp. NVDA -14% 171% 239% -50% 294%
Apple Inc. AAPL -16% 31% 49% -26% 20%
Tesla Inc. TSLA -40% 63% 102% -65% -32%
Source: FactSet
These seven stocks make up 30.6% of the SPDR S&P 500 ETF Trust SPY, which tracks the index by holding all of its stocks with a similar weighting to market capitalization. The cap weighting rewards success, but the concentration can also lead to higher declines during rough patches than those of less concentrated portfolios.
If you scroll the table to the right, you can see how the broad tech-driven decline in 2022 affected these stocks and how they have performed since the end of 2021.
And now investors might be wondering whether or not Tesla has hit a low point for this market cycle.
Lawrence McMillan analyzed options trading patterns for Tesla's stock and came to this conclusion.
Claudia Assis looked into the increasing number of listings by people trying to sell their Teslas and how owners of the electric vehicles are reacting to Tesla CEO Elon Musk's political activities.
More coverage of Tesla and Musk:
-- This could be Tesla's next plan to recoup China market share
-- LinkedIn co-founder has known Elon Musk for years. Here's what he says Americans don't understand about the Tesla CEO.
What about Microsoft?
Microsoft's stock is down 10% this year, and its forward price-to-earnings ratio has declined to 26.3 from 29.9 at the end of 2024. These are ratios of the share price to the rolling 12-month consensus earnings estimates among analysts polled by FactSet. Meanwhile the forward P/E for the S&P 500 has declined to a weighted 20.3 from 21.6 at the end of 2025.
The premium P/E valuation for Microsoft's stock might be justified by analysts' higher expectations for the company's growth. Based on consensus estimates, Microsoft's revenue is projected to increase at a compound annual growth rate of 13.7% from 2024 through 2026, compared with a projected sales CAGR of 6.1% for the S&P 500. And Microsoft's earnings per share is projected to have a CAGR of 14.6% from 2024 through 2026, compared with an EPS CAGR of 13.5% for the index. That last figure for the index is fascinating, as it bakes in expectations for continuing efficiency improvement across the board.
In the Ratings Game column, Therese Poletti shared thoughts from D.A. Davidson analyst Gil Luria, who expects Microsoft to outperform other tech giants going forward.
More Big Tech coverage:
-- Intel's stock is climbing. Here's the latest hope for a rescue.
-- Nvidia's stock is rebounding, but the key to a real recovery may surprise investors
A toughening economic picture for consumers
Venessa Wong and Jeffry Bartash reported on how it is becoming increasingly difficult for low- and middle-income consumers to afford living in the U.S. They did this by looking at economic numbers and by interviewing people about what they have been doing to manage their families' expenses.
Related coverage:
-- Tariffs could cost Americans an extra $1,600 a year. Here's where to find that money in your household budget.
-- Why student-loan borrowers 'are going to feel the brunt' of the Education Department layoffs
-- Economists thought Trump would try to prevent a recession. That's now in doubt.
-- Egg prices represent the cracks in the facade of America's economic wellbeing
How to make it easier to sell your house
If you are thinking about remodeling your home, one factor in your decision might be how appealing certain renovations will be to prospective buyers if you ever decide to move. Aarthi Swaminathan listed various renovations and the types of materials you can use, and highlighted the ones that may be most attractive to potential buyers in the current housing market.
More housing coverage from Aarthi Swaminathan:
-- Rocket-Redfin deal could make home buying more convenient - and more expensive
-- I'm 73 and own two rental properties in Florida. When is the best time to sell?
-- Americans are using this strategy to save money on home insurance. Is it a good idea?
News about companies and the activist investors who pressure them
Steve Gelsi researched the resurgent phenomenon of activist investors influencing the governance of large U.S. companies. Pressure to unlock value for investors can lead to significant changes, such as those announced this week by Southwest Airlines Co. (LUV).
Viking Therapeutics Inc. (VKTX) is trying to take on the giants in the GLP-1 weight-loss drug space - Eli Lilly & Co. (LLY) and Novo Nordisk A/S $(NVO.AU)$ - with an oral medication that would lower costs for patients who currently must inject their medications. Ciara Linnane reported on this week's important development for Viking that could help it bring its medication to market and remove an overhang for the stock.
(MORE TO FOLLOW) Dow Jones Newswires
March 14, 2025 11:53 ET (15:53 GMT)
MW What might happen next after the S&P 500's -2-
More GLP-1 news: Roche takes big step in weight-loss field with $5.3 billion deal. Novo Nordisk shares fall.
More companies coverage:
-- Wells Fargo's stock dips even as analyst proclaims 'good entry point' for investors
-- Banks are feeling the strain as lower-income consumers struggle with inflation and tariff chaos
-- This space stock has quadrupled in a year. Here's what could spark more gains.
-- Ulta Beauty CEO says investments in growth 'will take time' to pay off, but shares still rally
-- Another avocado seller is downplaying tariffs - but is still monitoring this Trump policy
How to keep safe as consumer protections go away
President Trump's policies, including the gutting of the Consumer Financial Protection Bureau, might cause you to worry about how easily you could be targeted by financial scammers. Andrew Keshner outlined seven tips for keeping your money safe.
Related: Chaos around Social Security could create an opportunity for scammers
The Moneyist plays it cool
This week Quentin Fottrell - the Moneyist - had advice for a MarketWatch reader worried about the safety of retirement accounts as financial market gyrate.
More from the Moneyist:
-- 'It's been a scary ride': My family has $800K in stocks. We lost two years of market gains in a few weeks. Do we sell - or buy?
-- My stepmother inherited 100% of my father's estate. She's leaving everything to her two children. Is that fair?
-- My parents left me $250K, but gave my 'irrational and neurotic' sister $1 million. Would you sever all ties?
Want more from MarketWatch? Sign up for this and other newsletters to get the latest news and advice on personal finance and investing.
-Philip van Doorn
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 14, 2025 11:53 ET (15:53 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.