JPMorgan trading desk turns bullish on US stocks, with a focus on tech and bank shares.

BlockBeats news, September 28 - Ahead of the release of the U.S. September nonfarm payrolls report, JPMorgan's trading desk ended its previous tactically neutral stance on U.S. equities and shifted back to a bullish outlook, with a focus on the technology and banking sectors.

Andrew Tyler, head of U.S. market intelligence at JPMorgan, said that stronger-than-expected U.S. economic activity, resilient consumers, steady corporate earnings growth, and the potential for bond yields to gradually stabilize have created a more favorable environment for risk assets. Tyler believes the technology sector remains the main bullish direction, with semiconductors and the "Magnificent Seven" expected to continue outperforming, while the AI theme is not yet over.

On cyclicals, JPMorgan prefers bank stocks, believing that reaccelerating economic growth, a potentially steeper yield curve, and improving capital markets activity will provide support for bank shares. The bank also believes that with oil prices and bond yields potentially pulling back, small-cap shorts face squeeze risk, so it no longer recommends shorting the Russell 2000 as a direct hedge against long technology positions.

The market's next focus is the U.S. September nonfarm payrolls report due Friday. A Bloomberg survey expects about 90,000 new jobs, with the unemployment rate holding around 4.1%. Fed funds futures show the market currently sees about a 65% probability of another Fed rate hike in October.