JPMorgan Chase & Co.’s trading desk is taking a cautious view toward US stocks following the selloff that erupted at the end of last week.
The markets are likely to remain choppy in the near-term, given that investors may continue to sell some of the tech stocks that surged during the recent rally, said Andrew Tyler, the bank’s head of global market intelligence, who cut his near-term view on stocks from bullish to “tactically cautious.” There’s also the risk that bond yields could move higher after this week’s inflation data as traders position for the Federal Reserve’s next rate decision on June 17.
“Stocks may take a couple weeks to find their footing,” he wrote in a note to clients.
US equities edged up Monday, rebounding slightly from the sharp selloff that raced through the market on Friday. That hit tech stocks particularly hard, with the Nasdaq 100 Index tumbling nearly 5%, its deepest drop since President Donald Trump’s April 2025 tariff rollout sent markets into a tailspin.
Tyler said the strength of the economy and corporate earnings will continue to support the bull market in stocks, saying “we do feel comfortable buying the dip.”
But he said it “makes sense to leg into a position over the course of this week and next” because of some factors that are exposing the market to the risk of an “imminent pullback.” He cited bond market volatility, position unwinding, a potential pullback from the AI trade and elevated equity issuance among them.
He said he’d grow bearish on stocks if coming inflation data pushes bond yields higher and negative earnings reports rekindle the tech-stock selloff. But there’s also the potential for a bullish shift if there’s an advance toward ending the US-Iran war that would ease worries about inflation.
“These variables would aid a bullish reaction, but we want to reiterate our underlying investment hypothesis that strength of the underlying fundamentals, micro and macro, point to stocks needing to be owned,” Tyler wrote.