JPMorgan has issued a cautionary outlook for global equities, warning that markets may be heading for a traditional summer downturn.
The bank’s strategists argue that the recent rally, heavily driven by investor enthusiasm for artificial intelligence, is unlikely to sustain momentum without broader participation from other sectors.
The warning comes as global stock markets have rallied in recent sessions, buoyed by strong financial results from key US semiconductor manufacturers.
Investor confidence in the AI sector has returned, sending tech-heavy indices higher.
However, JPMorgan suggests that this narrow focus creates vulnerability, as the broader market has not yet fully caught up to the tech-led advance.
Historically, summer months have seen softer trading volumes and increased volatility, often leading to pullbacks in equity valuations.