US stock markets tumble when hit by global recession, says report

The S&P 500 should fall a lot further to price in a US recession, if history is any guide. The US benchmark has slid 32 per cent on an average from a peak to a trough during the past eight recessions going back to 1969, based on a Bloomberg study.

Should the benchmark fall by a similar degree from the January high, the gauge would read 3,262, compared to around 4,200 as of Thursday close — that would imply a 22 per cent downside. The S&P500 had dropped to 3,667 on June 17 but has jumped 15 per cent in the past two months, amid easing recession fears and hopes that the Federal Reserve will be less aggressive in its monetary tightening than earlier anticipated. However, it remains to be seen if this is just a bearmarket rally or if the market prediction around ‘soft landing’ and staving off a recession are accurate.

(with inputs from BS Reporter)