JPMorgan’s clients are very worried about the stock market right now. A memo from the bank’s equity trading desk said: “The bears are screaming louder and louder…That’s what’s happening now…My clients have gone from cautious to outright bearish in a very short period of time.” Indeed, there are many risks remaining in this bull run that drove stocks to record levels by Monday. The biggest factor is that negotiations between the United States and Iran appear to be stalled after President Donald Trump said this week that a ceasefire between the two countries is “on life support.” Now, on top of that, inflation is also rising. But JPMorgan traders have a simple message for worried clients: “Calm down.” .SPX YTD Mountain S&P 500 Year-to-date The bank believes in “(i) a resilient consumer-driven macro environment, (ii) strong earnings, (iii) interest in emerging technologies that will keep the U.S. index at or near the top among (developed markets), (iv) the potential for a President Xi Jinping-Trump deal to reduce tensions and costs, and (v) “We remain tactically bullish on the agreement to reopen the Strait of Hormuz.” Option market activity also suggests further upside. Royal Bank of Canada’s Amy Wu Silverman told CNBC on Tuesday that she sees “historic” call option buying at this point. JPMorgan also noted that consumers remain in good shape thanks to tailwinds from the One Big Beautiful Bill Act. “We believe the bull market will continue until fundamentals change or there is a drastic change in positioning,” the bank’s traders said.
