Industrials Sound Alarm as Stocks Signal Recession

US small-cap and industrial stocks are dropping, signaling a potential recession, but some investors are dismissing the moves as noise for now. The S&P 500 Industrials index is down about 8% since August 1, and the small-cap Russell 2000 Index has lost over 11% from its July 31 closing high. Investors are pulling money from equity funds at the fastest pace since December. However, there is hope for stocks as earnings season approaches, with companies expected to post profit declines of just 1.1% in the third quarter. The Federal Reserve also forecasts stronger economic growth than expected. Some investors see the recent drops as a buying opportunity, while others caution that it's too soon to say if the stock market is signaling a recession.