The US stock market has officially entered a market correction.
Overnight, the US benchmark index, the S&P 500 Index (SP: .INX), closed at 5,521.52 points, down 1.39%.
That meant the S&P 500 is now down 10.13% from its most recent closing high (and all-time record) of 6,144.15 points on 19 February.
The definition of a market correction is a major index falling 10% or more from its most recent peak.
The S&P 500 has followed the Nasdaq Composite Index (NASDAQ: .IXIC) into a correction.
The tech-heavy NASDAQ officially entered a market correction last Thursday.
The NASDAQ closed at 17,303.01 points last night, down 13.7% from its peak (and all-time record) of 20,056.25 points on 19 February.
The Dow Jones Industrial Average (DJX: .DJI) has not yet entered correction territory.
The index is 9.33% down on its peak (and all-time record) of 45,014.04 points on 4 December.
The Dow Jones is different to the other indexes as it is not constructed in order of market capitalisation and is comprised of only 30 companies.
Why is the US stock market in correction?
The US stock market has been shaky for several weeks due to uncertainty over how tariffs will impact the US economy.
US President Donald Trump sees tariffs as a way of raising revenue from trading partners.
However, many economists argue that they eventually lead to higher consumer prices in the country that is imposing them on others.
This could lead to a resurgence in inflation, delayed rate cuts or even rises, and weaker consumer demand.
Fears of a recession were fuelled this week when Trump admitted there may be a "period of transition" as the tariffs are rolled out.
Magnificent Seven hit hard in correction
The Magnificent Seven US shares have been hit hard in the sell-off over the past few weeks.
Last night, the Tesla Inc (NASDAQ: TSLA) share price lost 2.99% to close at $240.68.
Stock in the electric vehicle manufacturer has fallen 32.4% over the past month.
The Nvidia Corp (NASDAQ: NVDA) share price closed at $115.58 per share, down 0.14% overnight and down 16.8% over the past month.
Apple Inc (NASDAQ: AAPL) shares fell 3.4% overnight to $209.68 per share. The tech stock is down 14.3% over the past month.
Meta Platforms Inc (NASDAQ: META) shares fell 4.67% overnight to $590.64 per share.
Stock in the Facebook parent company has tumbled 19.8% over the past month.
Amazon.com, Inc. (NASDAQ: AMZN) shares dropped 2.51% to $193.89 overnight.
Stock in the e-commerce giant has fallen 15.2% over the past month.
ASX 200 not far off a market correction
The S&P/ASX 200 Index (ASX: XJO) is trading at seven-month lows on Friday.
Shortly before the market close, the benchmark index was at 7,791.5 points, up 0.55% today and down 8.93% from its most recent peak.
That peak was 8,555.8 points on 14 February.
