In the 12 recessions since World War II, the S&P 500 typically declined by a median of 24%, alongside a median earnings decline of 13%. During recessionary periods, the S&P 500 correction averages -36%, compared to -15.4% during non-recessionary periods. Analysts have lowered Q3 EPS estimates for S&P 500 companies by 2.8% during July and August, which is within the range of recent averages. However, no sector witnessed an increase in Q3 EPS estimates. In a recessionary scenario, the S&P 500 forward price-to-earnings ratio is expected to fall from 21 to 16, with earnings estimates declining by 10% from current levels, potentially bringing the S&P 500 down to 3800. The average stock market decline during a recession is 31-32%, and the current market is trading in the top 1 percentile of all-time valuation readings, suggesting a potentially worse-than-average drop if a recession occurs. The bottom-up Q3 EPS estimate for the S&P 500 fell by 2.8% during the first two months of the quarter, larger than the 5-yr and 10-yr average decline.