JPMorgan Chase Rings the Alarm Bell on US Stocks: Trend Not Reversed Yet, but AI Divergence Intensifies, September May Be a "Deleveraging" Window

BlockBeats News, August 25th. JPMorgan Chase warned that although the U.S. stock market is still in a bullish trend and near historical highs, internal market dynamics have shown signs of sector rotation and increased technical resistance. Coupled with the seasonal weakness from August to October, investors may consider moderately reducing their equity exposure, but aggressive risk-off positioning is not necessary at the moment.

JPMorgan Chase's technical strategist Jason Hunter stated that while the S&P 500 Index has not yet shown a clear signal of a top, the market's internal structure is undergoing changes. The bank recommends continuing to utilize trend-following stop-loss strategies and mentioned that if the current market environment persists, a further reduction in equity exposure may be considered by early September.

Historical data shows that August to October is typically a weaker period for the U.S. stock market. According to data from Bank of America, the average return of the S&P 500 Index during this period since 1928 is approximately -0.02%; Goldman Sachs data shows that from early August to Election Day in midterm election years since 1974, the median return of the S&P 500 Index is 0%.

"The AI sector is a key risk factor that JPMorgan Chase is closely monitoring." The bank believes that the divergence in performance between AI hardware companies and large cloud computing firms shares similarities with the period before the peak of capital expenditure in communication equipment during the 2000 Internet bubble. The recent weakness in chip stocks such as NVIDIA, Micron, and Broadcom has further exacerbated market concerns.

Investors are eagerly awaiting NVIDIA's earnings report to assess whether AI infrastructure investments can continue to support high valuations. Additionally, policy resistance stemming from data center energy demands may also pose a new risk to AI trading.

Despite issuing a warning, JPMorgan Chase remains optimistic about the long-term outlook of the U.S. stock market and has raised its year-end target for the S&P 500 Index to 8000 points. In the short term, NVIDIA's earnings report, Federal Reserve Chair Powell's speech at the Jackson Hole symposium, and PCE inflation data will be key variables determining the market direction in September.