JPMorgan Shifts to Caution as Fed Hawkishness Rises
JPMorgan Chase & Co.'s trading desk has shifted to a 'tactically cautious' stance on US stocks due to hawkish comments from Federal Reserve Chairman Kevin Warsh. According to a Bloomberg report, traders led by Andrew Tyler 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. The US 10-year Treasury yield rose above 4.75% on Monday for the first time since January 2025, with swaps now implying 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. He noted that overall equity positioning remains largely neutral, but added that September is historically the weakest month for US stocks.