One of the United States' biggest banks now fears there's a one-in-three chance of the country slipping into recession within the next 12 months.

Bank of America issued its revised forecast in a worrying note to clients overnight, saying the uncertainty around the ongoing trade war with China is weighing heavily on world stock markets.

President Donald Trump has been in a year-long stand-off with China's Xi Jinping that shows no signs of resolution.

Trump has vowed to impose heavy tariffs on Chinese imports, leading to prolonged jitters and a growing sense of dread among investors internationally.

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As a result, that slowdown in the global economy and a decline in business activity have also contributed to Bank of America's gloomier outlook.

"Our official model has the probability of a recession over the next 12 months only pegged at about 20 per cent, but our subjective call based on the slew of data and events leads us to believe it is closer to a one-in-three chance," Michelle Meyer, Bank of America's head of US economics, said.

Some of the lights on the economic dashboard were also "flashing yellow", strongly hinting at a looming recession, Meyer said.

Three of the five indicators that track business performance — industrial production, automotive sales and the aggregated number of hours worked — are worrying.

Goldman Sachs echoed those concerns a day earlier, warning that the bitter US-China trade war could lead to a recession.

The bank doesn't expect a resolution to the conflict prior to the 2020 US election, which would mean a promised 10 per cent import tariff on Chinese goods would go ahead.

Goldman Sachs has revised down its growth forecast for the US economy by 20 basis points to 1.8 per cent.

"Overall, we have increased our estimate of the growth impact of the trade war," the bank said in the note from its economists Jan Hatzius, Alec Phillips and David Mericle.

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Overnight, US stocks fell sharply on the back of recession fears coupled with the trade war impact and ongoing protests in Asian economic powerhouse Hong Kong.

The Australian sharemarket is bracing itself for a turbulent day as a result.

A survey of economists last week, released on Friday, found that 70 per cent believed a recession had been brought forward thanks to the trade war.

The Reuters pulse-taking exercise also found that 45 per cent of economists believed a US recession was likely within the next two years.