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Though a US recession narrative fits the bill, it’s not clear that it’s driving equity markets, global professional services network Forvis Mazars says.

George Lagarias, its chief economist told Express.co.uk: “If anything, experience suggests that bad macroeconomic data and consequently higher rate cut expectations are more often fuel for market rallies, not pullbacks.

The economics expert said the equity markets “have corrected initially on the same limited tech-focused basis they had rallied in the past few months and then more broadly, due to technical factors and during a period which traditionally features low trading activity, at least from humans”.

“While they may well continue to correct in the next few days or weeks, we don’t see a fundamental case for a broader equity re-rating,” he added.

“The selloff mainly focused on the Magnificent Seven, and especially Nvidia, Microsoft and Amazon. Nvidia in particular, has shed more than 20 percent of its market value since the 10th of July.

“Despite the drop, the stock is still double its value at 2023 year-end, and trading 40x its forward earnings. While US large caps are down 5 percent, ex-the Magnificent 7, they are only down 0.75 percent.

He noted that the FTSE 100 “hasn’t moved significantly”.

“As of Monday 5 August, we are seeing evidence of spillover in the wider market (the Nikkei down 12.5 percent, US futures down 3 percent). However, this is precisely the point where we’d expect the Fed to affirm it’s ‘Put’, one way or another.”