JPMorgan has indicated that, with the easing of tensions in the Middle East, the Federal Reserve expected to hold interest rates steady, and corporate earnings remaining robust, one of the bank's internal market metrics has issued a "buy" signal, suggesting the S&P 500 still has room for further gains.
Andrew Tyler, head of JPMorgan's global market intelligence team, stated in a recent report that the bank's tactical positioning monitor has now triggered a buy signal. Historical data shows that after this indicator appears, the S&P 500 typically has good upside potential.
However, the team also cautioned that the overly concentrated positions in the semiconductor sector and the future development of the US-Iran conflict remain major risks currently facing the market. Despite this, JPMorgan maintains a tactical bullish view on US stocks, anticipating that falling bond yields, a weakening US dollar, and strong corporate earnings will continue to support the performance of the US stock market.
Andrew Tyler noted that these positive factors primarily stem from the de-escalation of military conflicts in the Middle East and the widespread market expectation that the Federal Reserve will keep interest rates unchanged at its meeting this Wednesday. On Monday, the three major US stock indexes edged lower, even as international oil prices fell amid eased tensions between the US and Iran, with market sentiment remaining cautious.
Meanwhile, JPMorgan believes the technology sector will still face some pressure in the short term. Andrew Tyler pointed out that as AI capital expenditures continue to rise, the market no longer automatically assumes that increasing AI investment will benefit chip manufacturers and related infrastructure suppliers. Investors are beginning to focus more on whether the massive spending can generate corresponding returns.
Nevertheless, he believes the fundamentals of the US economy remain solid. Continued growth in household net worth and checking account balances, robust retail sales, and still-limited credit pressure all indicate that consumer spending remains resilient, providing support for the US economy and corporate earnings.
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