But typically market corrections don’t just happen — they need some kind of catalyst to set them in motion. To try and glean some insight into what might trigger the next double-digit pullback, a team of investment strategists led by Piper Sandler’s Michael Kantrowitz examined the 27 corrections of 10% or more for the S&P 500 that have occurred since 1964.
The team found that, without exception, each of these selloffs has been primarily driven by one of three things: rising unemployment, rising bond yields or some kind of global exogenous shock. Sometimes, it has been a combination, as was the case during the two equity-market corrections that occurred during 1980.