JP Morgan traders back down bullishness on US stocks after Fed chair Warsh's Jackson Hole speech

JPMorgan Chase & Co.’s trading desk has shifted to a “tactically cautious” stance on US stocks for the next few weeks, following hawkish comments from Federal Reserve Chairman Kevin Warsh that strengthened expectations for interest-rate hikes this year, according to a Bloomberg report.

Traders led by Andrew Tyler, head of US market intelligence, moved away from their bullish view ahead of the Fed’s Sept. 16 policy decision, citing uncertainty over the interest-rate outlook.

Despite near-term risks, JPMorgan expects the broader market backdrop to remain supportive, helped by economic data and corporate earnings.


“We are moving to a tactically cautious / neutral view, which is to say that equity-market fundamentals remain strong, but that near-term variables are likely to cause markets to chop sideways,” Tyler wrote.

The US 10-year Treasury yield rose above 4.75% on Monday for the first time since January 2025. Swaps now imply nearly a 70% probability of a quarter-point Fed rate hike next month.

Tyler cited rate uncertainty, seasonal weakness and a potential unwind in high-flying AI stocks as key near-term risks, while noting that overall equity positioning remains largely neutral.

September is historically the weakest month for US stocks, adding to investor concerns over the sustainability of the AI rally and persistent inflation.

The August jobs report due Friday will be important, while consumer-price data due Sept. 11 could have greater significance for the Fed’s decision.

Tyler said a recession is currently unlikely over the next few quarters, but added that the Fed’s Sept. 16 meeting is a “live meeting” given the latest inflation concerns.

“Equity bull markets tend to end with either a hiking cycle or a recession,” Tyler said. “Currently, a recession is highly unlikely to manifest over the next few quarters,”