FORTUNE — U.S. stocks took a mighty tumble today, with the Dow falling 318 points and the Nasdaq shedding another 90. It was the culmination of the market’s worst week since November 2011, and is being blamed on everything from sluggish earnings to a Chinese manufacturing report.
More fundamentally, the question being asked is if this is a minor correction being exacerbated by overlong hedge funds, or if it is a sign that the bears have eaten the bulls. For that answer, we’ll need to wait a few weeks.
In the meantime, I’d think such uncertainty will also spread to the M&A market — thus slowing it down considerably.
For the past couple of years, market watchers have predicted M&A booms — thanks to such things as improving macro-economic conditions, generous credit and staggering corporate cash hordes. But those predictions have fallen flat, largely because many prospective buyers have been too nervous that they’d be overpaying. Basically the inverse of what happened after the financial crisis, when the universe of prospective sellers dwindled.
There could be a case that the recent market moves would spark new M&A, since assets are theoretically cheaper than they would have been just one month ago. But I don’t see it. Price-conscious buyers don’t want to pay discount retail today for what could be wholesale tomorrow. Likewise, it’s hard to convince a board to sell at $50 per share when their stock was at $55 per share just a few weeks earlier. In other words, this thing needs to play itself out a bit longer.
To be sure, some deals — maybe even big ones — will be announced next week. These have likely been in the works for a while. The lag may be felt a bit further down the line, as current processes slow down and new ones are at least temporarily delayed.
So sit tight for a little while so that this can all get worked out. And, if it turns out to just be a correction, then maybe we’ll finally be at that evasive equilibrium where both buyers and sellers want to do business.
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