In the midst of President Donald Trump's trade war, financial terms like bear market, dead cat bounce, capitulation, recession, and 'buy the dip' are becoming more common. A bear market is declared when key indices like the S&P 500 or Dow Jones Industrial Average drop by 20% or more from recent highs for an extended period. This term comes from bears hibernating, symbolizing a declining market, while a surging market is called a bull market because bulls charge forward.

A dead cat bounce occurs when stocks briefly bounce back during a steep decline or uncertain times, likened to the idea that even a dead cat will bounce if dropped from a great height. This rebound is usually short-lived, with the market downturn resuming. Capitulation occurs when investors give up on recovering their losses and sell their investments out of fear during periods of low confidence and high volatility. While capitulation can sometimes mark the market bottom, it is usually easier to identify in hindsight.

A recession is a period of economic decline characterized by shrinking economy and rising unemployment rates. Officially recognized by the National Bureau of Economic Research, a recession is determined by factors like hiring trends, income levels, spending, retail sales, and manufacturing output. The organization typically acknowledges a recession well after its onset, sometimes even a year later.

Before Trump's recent tariffs came into effect, economists at Goldman Sachs raised the chance of a U.S. recession from 35% to 65%, but rescinded the forecast after a 90-day postponement on most tariffs was announced. 'Buy the dip' is a strategy where investors buy stocks or enter the market when prices are low, hoping for a future rise in value. However, timing the market to identify the bottom and recovery period is extremely challenging.