An ongoing meltdown in U.S. stock prices, driven by pessimism about the economic outlook, is boosting the risk of a recession that arrives sooner than some professional forecasters anticipate, traders and investors say.
Falling equity prices have already contributed to the disappearance of $5 to $8 trillion in household wealth this year, and are now being accompanied by weaker corporate outlooks. Analysts cited a revenue and earnings warning from a single company, Snapchat parent Snap Inc.
as the main reason behind Tuesday’s rout in technology stocks, the S&P 500 index’s slide to near bear-market territory, and a flight to safety in government bonds.
Professional forecasters tend to speak about the risks of a U.S. recession in terms of one- to two-year horizons. Economists surveyed by The Wall Street Journal in April put the probability of a downturn over the next year at 28%, on average. Meanwhile, a…