Brief Summary
- A reaction can precede (and even erase) its trigger, (as in the Shield spell)
- A plain reading of Absorb Elements, shows it in effect when the triggering damage is received
- Both effects of Shocking Grasp occur at the same time
- The Absorb Elements reaction is in effect, before the target loses its ability to take reactions
Full Explanation
A Reaction can Precede its own Trigger
…as it does in the Shield spell:
CASTING TIME: 1 Reaction* | *- which you take when you are hit by an
attack…
… Until the start of your next turn, you have a +5 bonus to AC, including against the triggering attack…
From the Casting Time, Shield can only be cast once the triggering event has already happened; yet the spell’s effect ends up preceding the (hit) trigger and can even prevent the trigger from existing, (the hit was actually a miss!)
Moving past Shield to a general analysis of reactions, you notice the Casting Time on reaction spells (e.g. Feather Fall, Counter Spell, Hellish Rebuke,) all read as if the spell is cast after the trigger. But since we know reaction effects can occur before the trigger, we must look at the spell text for reaction timing.
When does Absorb Elements take effect
CASTING TIME: 1 Reaction* | * – which you take when you take acid, cold, fire, lightning, or thunder damage
The spell captures some of the incoming energy, lessening its effect
on you and storing it for your next melee attack. You have resistance
to the triggering damage type until the start of your next turn.
As expected, the Casting Time reads as if casting occurs after the trigger is done, but the spell text in bold explicitly narrates the damage resistance (effects) of Absorb Elements, as already in place when the damage is received.
Another Q&A and a Crawford tweet confirm that Absorb Elements is intended to effect the triggering damage.
Shocking Grasp
… On a hit, the target takes 1d8 lightning damage, and it can’t take
reactions until the start of its next turn.
With no text or rule to separate them, both of Shocking Grasp’s effects occur at the same time. As such, any effect that occurs before the lightning damage (e.g. Absorb Elements), also occurs before the reaction debuff.
Absorb Elements is a defensive reaction spell that exists to trigger and reduce incoming elemental damage, before it is actually received. Since its effect precedes the damage from Shocking Grasp, it also precedes Shocking Grasp’s reaction debuff.