US stocks have experienced a strong bull market, achieving over 20 all-time highs this year. However, JPMorgan Chase & Co’s trading desk cautions that the Federal Reserve’s upcoming actions could dampen investor enthusiasm. According to Andrew Tyler, the bank’s head of global market intelligence, the current market strength feels robust, but a widely anticipated interest-rate cut at the September 17 meeting might trigger a ‘Sell the News’ reaction as investors reduce their positions. JPMorgan Chase & Co is a leading global financial services firm with assets of $4.1 trillion and operations worldwide. The firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management.
Despite the bullish sentiment, JPMorgan’s trading desk is maintaining a lower conviction tactical bullish outlook. They highlight several potential risk factors, including inflation, employment figures, and the ongoing trade war, in a note released on Monday. Additionally, they observed that retail investors typically decrease their market involvement in September, and fewer companies are engaging in share buybacks. The S&P 500 Index has risen by over 30 per cent from its April lows, which coincided with President Donald Trump’s initial moves in the global trade war.
While the stock market has demonstrated resilience thus far, investors are increasingly wary due to the delayed impact of tariffs and recent disappointing jobs data. This heightened sensitivity comes just before the expected rate cut, during what is historically the worst month for the US equity market. Since late August, the S&P 500 Index has largely traded sideways, with daily movements of less than 0.9 per cent in either direction, gradually reaching new record levels.
A similar pattern occurred in July, when the benchmark index experienced a full month without a single daily move exceeding 1 per cent. This period marked the longest stretch of market stability in two years. Investors remain cautious as they await the Federal Reserve’s decision and assess the evolving economic landscape.
