The short version

A bull market is a sustained rise in prices; a bear market is a sustained fall. The common dividing line is 20 percent: a gain of about 20 percent from a recent low marks a bull market, and a drop of 20 percent or more from a recent high marks a bear. A smaller fall, between 10 and 20 percent, is called a correction.

Where the names come from

The usual story is that a bull attacks by thrusting its horns upward, while a bear swipes its paws downward, so a rising market is bullish and a falling one bearish. Whatever the origin, the labels have stuck, and you will hear them attached to everything from individual shares to whole economies.

What drives a bull market

Bull markets tend to run on confidence. Growing company profits, falling or stable interest rates, low unemployment and optimism about the future all encourage investors to buy, which pushes prices up, which draws in more buyers. Bull markets can last for years, and over the long run shares have spent far more time rising than falling, which is why staying invested has historically paid.

What drives a bear market

Bear markets usually arrive when that confidence breaks. A recession, a jump in interest rates, a shock such as a financial crisis or a pandemic, or simply prices that had climbed too far can trigger selling. Fear feeds on itself, and falls can be fast. Our explainers on how the Federal Reserve works and what inflation does to your money cover two of the forces most often behind a downturn.

Corrections versus bear markets

Not every drop is a bear market. A correction, a fall of 10 to 20 percent, is common and often short, a normal part of investing rather than a crisis. The 20 percent line between a correction and a bear market is a convention, not a law of nature, but it is the one markets use.

How to think about the labels

The hardest truth about bull and bear markets is that they are named in hindsight. Nobody rings a bell at the top or the bottom; you only know a bear market began once prices have already fallen 20 percent. That is why reacting to the label often backfires: selling after a large fall can lock in the loss just before a recovery, and missing the best rebound days has historically dragged heavily on returns. For most investors, a sensible mix of stocks and bonds held through both phases beats trying to jump in and out.

How long they tend to last

History offers a lopsided pattern. Bull markets have tended to last far longer than bear markets, often several years, while bear markets, though sharp and frightening, have usually been measured in months rather than years. Over the long run, shares have spent much more time rising than falling, which is the statistical reason patient investors have been rewarded. None of that guarantees the next cycle will behave like the last, but it explains why trying to dodge every downturn has a poor record: you have to be right twice, selling near the top and buying back near the bottom, and few manage either.

The bottom line

Bull and bear markets describe where prices have been, a sustained rise or a 20 percent fall, not where they are going next. Understanding what drives each helps you read the news, but the labels are confirmed only after the move. The current market level sits on our rates and returns page, and the glossary defines the terms.