Wall Street is at it again: pricing in a recession, but not everyone's on board. According to JPMorgan's Nikolaos Panigirtzoglou, U.S. markets are sending mixed signals about the economy's future.

While small-cap stocks, bond yields and base metals are flashing red, credit markets are staying cool, just as they did during the past two years' false alarms.

Who’s Crying Recession?

The Russell 2000 small-cap index tumbled 17% from its peak, implying a 52% probability of a U.S. recession based on historical drawdowns. The Russell 2000 index tracking iShares Russell 2000 ETF (NYSE:IWM) is down 9.46% year-to-date and 11.47% over the past month alone.

The S&P 500-tracking SPDR S&P 500 ETF (ARCA: ) is down 8.7% over the past month. The S&P 500 index signals a 33% chance, while base metals and 5-year Treasuries price in recession risks of 45% and 46%, respectively.

These numbers suggest the economy is teetering — but credit markets aren't buying it.

Read Next: 3 ETFs To Help You Navigate Market Volatility, Recession Risks

Credit Markets: The Smart Money?

That's a stark contrast to the 50% risk embedded in small caps and rate markets. If credit markets hold the crystal ball — as they did in 2022 and 2023 — this could be another false alarm.

So, Why Is The Nasdaq Down?

If credit markets are right again, the recent correction could be just noise. If they're wrong?

The recession alarm bells coming from small caps and rate markets might be worth heeding.

Read Next:

• Nasdaq 100 Falls 12.4%, Echoing Historical Bear Market Signal: ‘Not The Best Sign For Bulls’

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