JPMorgan Traders Turn Bullish On US Stocks But Warn Of Pain To Come

JPMorgan Chase & Co.'s trading desk is turning tactically bullish on US equities, predicting that tailwinds including Big Tech earnings and trade deal announcements will continue to lift stocks after the recent rout.

Still, the bank was quick to emphasize in a note to clients Monday that the rally's momentum could fade within weeks, with the negative impacts of US tariffs poised to begin dragging on the economy in the months ahead.

“Overall, the de-escalation trade has room to run,” wrote head of global market intelligence Andrew Tyler, adding, however, that “this is not an all clear for markets.”

US stocks churned on Monday, with the S&P 500 Index falling as much as 1% in afternoon trading as the technology-heavy Nasdaq 100 Index's slide reached 1.4%. The declines come after US equities had their second-best week of 2025 as President Donald Trump touted progress in trade negotiations.

Tyler and his team, who were previously “tactically bearish” on US shares, said that their latest call differs from past bullish views because it's largely based on technical factors rather than just fundamentals.

“The combination of light positioning, low liquidity, subdued investor participation means that this market is likely to drift higher in the absence of negative news such as tariff headlines or a spike in bond yields,” they wrote.

The potential for an announced trade deal also skews the risk-reward setup positively, they added.

Treasury Secretary Scott Bessent said on Monday said the US has put China to the side for now as it seeks trade deals with between 15 to 17 other countries, while indicating that it's up to Beijing to take the first step in de-escalating the tariff spat with the US due to the imbalance of trade between the two nations.

Tyler's team anticipates earnings from megacap technology companies to be a potential boon for stocks. This week will put that belief to the test, with so-called Magnificent Seven companies Microsoft Corp., Apple Inc., Meta Platforms Inc. and Amazon.com Inc. all scheduled to report results.

The cohort, which also includes Google-parent Alphabet Inc., Tesla Inc. and Nvidia Corp. — is projected to post average profit growth of 15% in 2025, a forecast that's barely changed since the beginning of March despite escalating trade tensions.

“We are still 1-2 months away from seeing the negative impact of the trade war on the real economy,” Tyler warned, echoing forecasters across major Wall Street firms bracing for US data to sour. The next big hurdle for traders will be payroll figures on Friday.

Separately, the equity research team at JPMorgan including Fabio Bassi and Dubravko Lakos-Bujas sees the S&P 500 trading between 5,200 and 5,800 points, veering on positive trade headlines and worries about a recession.

They communicated “a bias to sell risk assets on strength rather than chasing the momentum as a complete shift in narrative will require clearing further headlines.”