DEFINITION of 'Downswing'

A reduction in the overall level of economic or business activity. Downswings may be caused by fluctuations in the business cycle or a variety of macroeconomic events. Downswing may also refer to the downward movement in the value of a security following a period of stable or rising prices.


A downswing is one of many buzzwords related to poor performance in the market. When interest rates rise, the economy will typically experience a downswing. The new rates make it more difficult for businesses to acquire financing, which results in a lower number of new firms and less expansion.

A downswing in the stock market or a single security will usually occur after the market has peaked. At this point, a bear market starts to occur as prices swing lower.

  1. Business Cycle

    The fluctuations in economic activity that an economy experiences ...
  2. In The Tank

    A slang term referring to very poor performance, as in that of ...
  3. Recession

    A significant decline in activity across the economy, lasting ...
  4. Peak

    The highest point between the end of an economic expansion and ...
  5. Bear Market

    A market condition in which the prices of securities are falling, ...
  6. Market Swoon

    A slang term for a decline in the overall value of the stock ...
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