JPMorgan Chase & Co. , trading desks have been tactically bullish against US stocks and predict that Tailwind, which includes major technology revenues and announcements of trade contracts, will continue to lift stocks after the recent defeat.
Still, the bank quickly highlighted in a note to its client on Monday that rally momentum could disappear within weeks.
“Overall, there is room for operation in the de-escalation transaction,” wrote Andrew Tyler, head of Global Market Intelligence, adding, “This isn’t all clear to the market.”
US stocks were stirred up on Monday, with the S&P 500 Index down up to 1% in afternoon trading as slides of the technology-heavy NASDAQ 100 Index reached 1.4%. The decline comes after US stocks won the second best week of 2025 as President Donald Trump touted advances in trade negotiations.
Tyler and his team, who previously “tactically bearish” on US stocks, said their latest call differed from past bullish views, as they are heavily based on technical factors rather than just basics.
“The combination of lightweight positioning, low liquidity and suppressed investor participation means that this market is likely to drift higher if there are no negative news such as tariff headlines or bond yields,” they wrote.
He added that the potential of the announced trade contracts has actively distorted the risk compensation setup.
