Another day, another tariff-driven selloff on Wall Street.

The sharp drawdown on the U.S. stock market picked up steam on Thursday, pushing the S&P 500 SPX into correction territory as investors fretted about an escalating global trade war that could hurt the world's largest economy.

The S&P 500 index fell 1.4% to end at 5,521.52 on Thursday. The large-cap index has now officially entered correction territory - defined as a 10% decline from its recent peak - after closing more than as 10% below its recent high of 6,144.15, set on Feb. 19.

It took just 16 trading days for the S&P 500 to fall from its recent high to market correction - the fastest peak-to-correction shift since the six trading days at the start of the COVID-19 pandemic in March 2020, according to Dow Jones Market Data.

Investors want to know how stocks have tended to perform in periods after the S&P 500 closed in market correction.

History shows that, since 2008, stocks have typically declined in the first month after the S&P 500 entered correction territory, with the index delivering an average negative return of 1.7% after 30 days. However, stocks have tended to rebound over longer time frames, with the S&P 500 gaining an average 2.1% over the following three months and nearly 5% over six months, according to Dow Jones Market Data (see chart below).

Going back to 2008, the large-cap index has even registered an outsize 15.3% average advance one year following the first close below the correction threshold, according to Dow Jones Market Data.

The sharp stock-market selloff Thursday came as President Donald Trump has ratcheted up trade tensions with major U.S. trading partners by unleashing more tariff threats. The president on Thursday took aim at the European Union, calling it a "hostile and abusive taxing and tariffing authority" and threatening a 200% tariff on alcohol from E.U. countries.

Canada is also engaged in tit-for-tat tariff hikes with the United States. Canadian Finance Minister Dominic LeBlanc and Ontario Premier Doug Ford will meet with U.S. Commerce Secretary Howard Lutnick on Thursday in an effort to calm the rising trade tensions triggered by tariffs the White House imposed on steel and aluminum imports from around the world earlier this week and by previous threats of a 25% tariff on all goods from Canada.

The rising uncertainty around Trump's tariff plans and retaliatory levies from trading partners have sparked risk-off sentiment and volatility on Wall Street, which has driven U.S. stocks lower over the past few weeks and fueled concerns of an economic slowdown.

U.S. Treasury Secretary Scott Bessent on Thursday tried to calm investors worried that the Trump policies will tip the economy into recession. In an interview on CNBC, Bessent said he wasn't worried about recent stock-market volatility, saying that investors should remain focused on the long term.

How common are stock-market drawdowns?

"The sharp drop in equity markets has been painful, especially given the selling pressure started off at a fresh record high on Feb. 19. However, the downside rate of change and current drawdown is nothing out of the ordinary," said Adam Turnquist, chief technical strategist at LPL Financial.

Since 1950, 92% of trading days have been accompanied by some degree of a drawdown from the S&P 500's peaks, with declines of less than 5% from recent highs being the most common, occurring in around 40% of those days, according to data compiled by LPL Financial (see chart below).

Meanwhile, pullbacks of between 5% and 15% from recent highs have occurred in over one-quarter of all trading days, making the current 10% drawdown "nothing out of the ordinary," Turnquist told MarketWatch in emailed commentary on Thursday. Market downturns from recent peaks that exceed 15% have occurred in almost 26% of all trading days since 1950, but most of them happened in the middle of a recession, he said.

"Swift drawdowns also create oversold conditions, and we are beginning to see signs of the broader market reaching washed-out territory. However, the damage to longer-term breadth, lack of institutional participation and defensive rotational pressures leave us cautious on buying the dip right now," Turnquist said.

U.S. stocks finished lower on Thursday, with the Nasdaq Composite COMP tumbling nearly 2%, while the Dow Jones Industrial Average DJIA was off over 530 points, or 1.3%, according to FactSet data.