What if US GDP unexpectedly shrinks into a technical recession?
A surprise GDP contraction confirms technical recession; banks and high-beta crypto lead lower as credit spreads widen and the Fed-stays-tight optionality fades. The cleanest historical rhyme is the 2008 and 2020 recessions where financials and credit led the drawdown well before the index bottomed. Forward angle: a single negative GDP print this cycle could be inventory/trade-deficit noise (cf. Q1-2025 mechanics), so demand confirmation in jobless claims matters more than the headline.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 6–18 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. US GDP prints a surprise contraction, confirming a technical recession. The trigger decomposes into signed root‑shocks — Growth surprise ▼ · Recession signal ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.0% hist -8.15–+1.82% · other way -1.0% (n=12) |
| 2 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.8% model prior · unmeasured |
| 3 | Financials XLF 📈 chart | Equity | ▼ -0.7% hist -0.44–+0.0% · other way +0.21% (n=12) |
| 4 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -7.89–+2.39% · other way +4.71% (n=12) |
| 5 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.8% hist -1.04–-0.03% · other way +24.57% (n=12) |
| 6 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.6% hist -0.84–+0.86% · other way +3.18% (n=12) |
| 7 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.6% hist -4.44–+1.36% · other way +5.56% (n=12) |
| 8 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.45–+0.05% · other way -0.29% (n=12) |
| 9 | High-yield credit HYG 📈 chart | Rate | ▼ -0.5% hist -0.35–-0.15% · other way -0.35% (n=12) |
| 10 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -0.61–+0.82% · other way +2.4% (n=12) |
| 11 | JPMorgan JPM 📈 chart | Equity | ▼ -0.4% hist -0.48–+1.01% · other way +2.47% (n=12) |
| 12 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +0.3% hist +0.08–+0.28% · other way -0.17% (n=12) |
| 13 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.3% hist -0.72–+0.14% · other way +0.18% (n=12) |
| 14 | Nvidia NVDAon Hyperliquid 📈 chart | Equity | ▼ -0.3% hist -0.92–+1.39% · other way +4.34% (n=12) |
Probable recommendation
Why we may diverge from history
Trust the cascade short on AMD/SMH/TSM/AVGO: realized 'up' is 2025 tariff-rebound and AI-capex regime, while the on-channel recession analogues (Lehman -21%, COVID -34%) confirm the cascade — history is regime-biased.
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| CL CL | SHORT | -3.2% · 5d -1.7% | 75% | 40 | 0.39 | ✓ matches cascade |
| MU MU | SHORT | -3.5% · 5d -2.8% | 75% | 40 | 0.37 | ✓ matches cascade |
| SOL SOL | SHORT | -6.8% · 5d -5.4% | 66% | 38 | 0.24 | ✓ matches cascade |
| JPM JPM | LONG | +1.1% · 5d +0.0% | 62% | 40 | 0.20 | ⚠ differs |
| ETH ETH | SHORT | -6.9% · 5d -4.9% | 61% | 38 | 0.16 | ✓ matches cascade |
| AMD AMD | SHORT | -0.1% · 5d -1.4% | 60% | 40 | 0.16 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -3.9% · 5d -2.8% | 59% | 39 | 0.14 | ✓ matches cascade |
| XLF XLF | LONG | +0.2% · 5d -0.1% ↺ fades | 57% | 40 | 0.13 | ⚠ differs |
| 30y yield DGS30 | LONG | +3bp · 5d +2bp | 57% | 40 | 0.13 | ⚠ differs |
| SMH SMH | LONG | +1.0% · 5d -0.3% ↺ fades | 55% | 40 | 0.09 | ⚠ differs |
| Gold XAU | LONG | +0.1% · 5d -0.3% ↺ fades | 55% | 40 | 0.08 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.1% · 5d +0.2% ↺ fades | 53% | 40 | 0.04 | ✓ matches cascade |
| XLK XLK | LONG | +0.6% · 5d -0.5% ↺ fades | 53% | 40 | 0.04 | ⚠ differs |
| MRVL MRVL | LONG | +1.5% · 5d -2.1% ↺ fades | 53% | 40 | 0.04 | ⚠ differs |
Why this probability
Technical recessions periodic; 18mo window plus slowing growth, but soft-landing base case. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.