"Our biggest concern is that the market sell-off becomes a self-fulfilling prophecy causing corporate CEOs to cut back on investments and consumers to pull back on spending leading to further cuts and a recession," the analysts added.
"In our view, the direct impact of these steep market declines is limited," they said in a note published Monday.
Sustained market declines in the wake of the recent global sell-off could become a "self-fulfilling prophecy" that eventually leads to a recession, Morningstar DBRS analysts warned.
The analysts also said that the impact of the market volatility on banks is likely to be limited, even if further market declines materialize, or if the U.S. enters a recession.
There was also "no material impact" expected for capital management by banks in Japan, a region that also saw steep declines.
Persons:
Morningstar, Nonfarm payrolls
Organizations:
New York Stock Exchange, Global, Japan's Nikkei, Tech, Federal Reserve, Morningstar, Congressional, U.S, Capital
Locations:
New York City, U.S, Japan