The worst of the US equity correction may be over, with credit markets indicating a lower risk of recession, according to JPMorgan Chase & Co.

Credit markets, which were proven right on multiple occasions over the past two years, “are once again more dismissive of US recession risks than equity or rate markets,” strategists including Nikolaos Panigirtzoglou and Mika Inkinen wrote in a note dated Wednesday.

While small caps, with greater sensitivity to domestic growth, are pricing in a 50% probability of a US recession, debt is implying a 9% to 12% probability of the same, according to JPMorgan’s analysis. The rate and commodity markets are displaying similar expectations to equities, it shows.

JPMorgan’s view offers investors some relief after mounting fears that the world’s biggest economy would contract pushed stocks near correction territory. Just this week, analysts at multiple banks including Goldman Sachs Group Inc. and Citigroup Inc. downgraded their views on US equities, citing growth concerns, while market forecasters including Ed Yardeni have tempered bullish calls for 2025.

President Donald Trump’s on-again, off-again trade policies coupled with the ongoing government job cuts have sent markets into a spiral with the S&P 500 Index falling almost 9% from a record high in February. Tech stocks fell into correction.

The recent slide appears to be more driven by quant fund position adjustments and less driven by fundamental or discretionary managers reassessing US recession risks, JPMorgan strategists wrote.

Some multistrategy hedge funds are facing their biggest challenge since the early days of the pandemic amid a market selloff that’s forcing them to unwind crowded trades at a ferocious clip. Macro hedge fund specialist Brevan Howard Asset Management is slashing the amount of risks that its traders can take amid a performance slump that has wiped out last year’s gains.

Still, the market may get some support from continued inflows for exchange traded funds. Equities may also be buoyed by potential buying from month or quarter-end rebalancing by mutual funds and US defined benefit pension funds as well as some sovereign wealth investors that could amount to around $135 billion, JPMorgan strategists said.

“If US equity ETFs continue to see mostly inflows as they have thus far, there is a good chance that most of the current US equity market correction is behind us,” they said.