The most accurate team from JPMorgan Chase in this round of market trends has spoken again: Be cautious with U.S. stock tactics

After accurately capturing the high point of 6,000 in March and the low point in April, the market intelligence team at Wall Street investment bank JPMorgan has issued another warning: this rebound, which has left countless people missing out, may soon reach its end.

According to news from the Wind Trading Desk, Andrew Tyler, head of JPMorgan's market intelligence team, stated in a recent report that given the rapid changes in geopolitical situations and the approaching deadlines for trade agreements, "the market is likely facing a near-term pullback." The team has officially shifted its stance from "tactically bullish" to "tactically cautious," believing that with the expectation of increased volatility across multiple asset classes, the risk of a pullback is rising. This move comes after the S&P 500 index rebounded strongly by 20% from its April low and officially entered a bull market.

Looking back over the past three months, the team has proven to be one of Wall Street's most accurate forecasters. The team successfully turned tactically bearish when the S&P 500 index was at 6,000 on March 3, and shifted to a tactically bullish stance about two weeks ago (around late May/early June) when the market was at its low.

Four Major Risk Factors Emerge

In the report, Tyler detailed the key factors prompting the change in stance:

Geopolitical escalation risks are increasingly prominent.

JPMorgan cited media reports indicating that Trump hinted at possible U.S. intervention in the Middle East conflict. However, according to Global Times, the U.S. government has informed its Middle Eastern allies that it does not intend to actively intervene in the Iran conflict unless Iran targets Americans. The bank warned that if the conflict escalates from actions aimed at destroying nuclear facilities and missile capabilities to regime change, it could evolve into a conflict lasting several months or even quarters. Even if escalation is avoided, the market may still endure 1-3 weeks of negative impact.

Short-term inflation shocks cannot be ignored.

According to the bank's commodity analysts, oil prices could rise to $120 per barrel. This would exacerbate the current energy surge (WTI crude oil has risen 20% since May, and gasoline has increased by 9.3%). The bank expects that if oil prices reach $120, it could push the CPI from the current 2.4% up to 5.0%, forcing the Federal Reserve to tighten monetary policy significantly once again.

Profit-taking pressure is building.

Since the low on April 8, the S&P 500 index has risen by 20%, the Nasdaq 100 index has increased by 26.6%, the technology sector has surged by 33.35%, and the semiconductor index SOX has skyrocketed by 42.7%. Historical data shows that the SOX index typically performs poorly from June to September.

Tight Positions and the Potential for Capital Rotation Are Emerging.

Despite the strong performance of U.S. stocks, they are still trailing the global market by 350 basis points and the Asia-Pacific market by 748 basis points year-to-date. The recent strong rebound in technology and AI may be difficult to replicate the significant outperformance of U.S. stocks in the first quarter. Rising commodity prices will benefit resource-rich countries, while a resurgence of the dollar's safe-haven attributes will put pressure on non-U.S. assets.

A Major Shift in Trading Strategy

Despite the cautious shift, JP Morgan believes that any pullback may be "shallow" and suggests viewing pullbacks as buying opportunities. JP Morgan recommends adopting a market-neutral or slightly bearish stance, favoring commodity-oriented countries like Australia and the Latin American region. In terms of U.S. stocks, it recommends defensive sectors to hedge against cyclical sectors, with energy and healthcare sectors worth paying attention to.

It is noteworthy that the timing of this warning is quite delicate. According to reports, just a week ago, Goldman Sachs' trading team also issued a similar warning, stating that "trouble is brewing beneath the surface," and suggested starting to sell "this junk rally."

When two Wall Street giants simultaneously turn cautious, whether this rebound driven by retail investors and corporate buybacks can continue to stage a short squeeze legend may soon be revealed