Historically, stock market declines have coincided with a wide range of economic outcomes, but in adverse cases the causality almost always runs from the economy to markets rather than the reverse. Currently, the economy and financial system seem well-placed to manage a correction if the stock market were to collapse under its own weight. The bigger risk is that an economic shock hits first, sparking a market sell‑off that tightens credit and amplifies an existing downturn.
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