False alarm no longer? Recession fears continue to spook US stock market

FOR the second time in a little over two months, the US stock market is experiencing fears of a recession. This time, it might not be a false alarm, with dire economic data in China and some early signs of the US following suit.

In early August, the S&P 500 plunged 10 per cent as traders feared that the US Federal Reserve would act too late to save the US economy from a major recession.

September began with almost exactly the same pattern. The US central bank is almost certain to cut rates by at least a quarter of a percentage point at the end of its two-day meeting on Wednesday (Sep 18), but the stock market is behaving as though that’s too little, too late.