Goldman Sachs has just upped its estimated probability of a U.S. recession in the next 12 months from 15% to 25% in a Sunday report for clients.

Still, the economy looks "overall good" and the risk of a recession is "limited," the report said. The Federal Reserve also has room to cut rates in response if necessary.

It's another sign of growing concern about the economy's direction and whether the Fed has held off rate cuts for too long. Equity markets took a fall and by a half hour before the final bell, as the S&P 500 was down 3% the Dow Industrials was off by 2.6%, and the Nasdaq Composite dropped around 3.4%. Yields on the 10-year Treasury were 3.78% at the end of Monday.