The S&P 500 Index was down 2.3% early Monday afternoon, recovering from the worst of a hair-raising morning drop, while the technology heavy Nasdaq composite fell 2.95% in midday trading and the Dow Jones index lost 1.9% after global markets plunged over worries about a possible recession in the world’s biggest economy.
Driving the rout: Sharp declines in high-flying tech stocks including Nvidia, Apple, Amazon and Google. As investors ran to buy U.S. treasuries, mortgage rates declined, opening the door for some borrowers to refinance, experts said.
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How likely is a recession?
While some economists say current market conditions raise the risk of a recession within the next 12 months, others are downplaying concerns.
“The recession fears are overblown,” said Scott Wren, senior global market strategist at Wells Fargo. “It’s not time to panic here.”
“The recession risk was not zero a month ago. It wasn’t zero 6 months ago,” Wren said. “You could probably make an argument that it’s a little bit higher today than it was last week, and that’s only because the labor market report was weak, but we still think a recession is not going to happen, that it’s a relatively low probability.”
Wells Fargo economists said they expect an economic slowdown – not a recession − noting the labor market is in the early stages of weakening and “still some distance away from even the most moderate, modern recession,” which took place…
