Market laggards gain favor as summer selloff fears mount

Stock market underperformers are emerging as a potential hedge against a broader summer selloff, according to analysis from MarketWatch.

As investor enthusiasm for high-flying technology stocks shows signs of fatigue, capital is shifting toward value and defensive plays that have lagged the recent market advance.

The rotation comes amid growing caution from major financial institutions.

JPMorgan strategists recently issued a warning that global equities may be heading for a traditional summer downturn, suggesting the recent rally—largely fueled by tech sector momentum—could be vulnerable to a pullback.

This shift in sentiment highlights a recurring seasonal pattern where summer months often bring increased volatility and lower trading volumes.

For traders, the move toward laggards represents a defensive posture, aiming to preserve capital while awaiting clearer directional signals in the second half of the year.