Given the recent thumping their portfolios have taken, investors could be forgiven for thinking that equities must now be factoring in a lot of downside risk. False hopes help no one, however. US stocks are barely out of the starting gate when it comes to pricing in an economic downturn.

From their mid-February peak to their low on April 8 — the day before US President Donald Trump announced a 90-day pause on his so-called reciprocal tariffs — the S&P 500 tumbled 19 per cent. It could have been worse: market darlings Nvidia and Apple were off about 30 per cent over that time. The subsequent relief rally has cut the index’s loss to 12 per cent.

That’s not a big drop, by historical standards. On average, the S&P 500 drops 37 per cent peak-to-trough in a recession, according to a JPMorgan Chase analysis of the five that have happened since 1980.