The S&P 500 slipped past two closely watched levels on Friday. It fell below its 200-day moving average and is down more than 10 percent from its intraday high of 2.940.91 on Sept. 21, a correction as defined on Wall Street.The 200-day moving average is one of the most popular technical indicators used by investors to help analyze price trends. The metric, the average price of the last 200 days, is often considered a barometer of whether securities are in a healthy long-term trend. Earlier this year, sell-offs in February, March and April each saw the S&P 500 bottom at that key level.
Both the Dow and the S&P 500 have wiped out gains this year, with the Nasdaq the only one of the major indexes holding on to a year-to-date gain of 3.3 percent. Of the 11 sectors in the S&P 500, six are poised to close Friday in correction territory. The Dow is down 5.9 percent in October, on pace for its worst month since it lost 6.57 percent in August 2015.
"You've got a ton of profit-taking that happened last week, and you're not going to get a sustainable bounce until after the election," Salt Financial president Alfred Eskandar told CNBC. "We know where rates are, we know the Fed's going to raise by 25 basis points; these are all known. What's not known is the outcome of the election [on Nov. 6]. That's going to give people confidence to either put their foot on the gas or ease off."
Thursday was the busiest day of the third-quarter corporate earnings season, with giants such as Amazon and Alphabet reporting.
Amazon shares plunged after revenue came in below Wall Street forecasts, while fourth-quarter guidance also disappointed. The company's stock fell through its 200-day moving average, losing as much as 10 percent in after-hours trading. Google parent Alphabet also saw shares sink, after the tech company's revenue also disappointed in the third quarter.
Snap and Western Digital also saw shares fall, with the tech company continuing to lose money while the data storage company saw revenue come in below estimates.
Shares of Intel, Mattel and Expedia all rose slightly but were not enough to outweigh the falling momentum from the biggest tech stocks.
GDP grew faster than expected, giving a momentary boost to stocks, as inflation was kept in check and consumer spending surged, according to data released by the Commerce Department on Friday. Consumer sentiment was lower than anticipated in the final reading of October, although the key economic survey remains near historically high levels.
The Cboe Volatility Index, also known as the fear gauge on Wall Street, jumped as high as 27.52 on Friday, its highest level since Oct. 11 when it hit 28.84. If the VIX breaks above 28.84, it will be at its highest level since Feb. 12, when it hit 29.70.
— CNBC's Tom Franck and Fred Imbert contributed to this report.