JPMorgan strategist Fabio Bassi said U.S. equities still have room to move higher through the end of the year, though gains are likely to depend more on sector rotation than on a broad rise across all risk assets. The bank kept a constructive stance on stocks and said it favors high-quality growth names, cloud computing leaders, and semiconductor shares that have already been repriced. The view comes as U.S. market action has become more selective, with volatility picking up in the Nasdaq and the Philadelphia Semiconductor Index. Some of the strongest earlier winners tied to the AI trade have also faced concentrated selling. According to JPMorgan, that shift does not necessarily signal the end of the bull market. Instead, it may reflect capital moving out of crowded trades and into areas with clearer earnings visibility and valuations that can better absorb current conditions. The bank also interpreted rising long-dated Treasury yields as a sign that capital demand and investment opportunities are increasing, particularly as AI infrastructure, power grids, data centers, and cloud computing continue to attract heavy spending.
JPMorgan strategist Fabio Bassi said on Aug. 25 that U.S. stocks still have room to rise into year-end, but the advance is likely to rely more on sector rotation than on a synchronized move higher across all risk assets.
The bank kept a constructive view on equities and said it prefers high-quality growth stocks, cloud computing leaders, and semiconductor shares that have gone through repricing.
Market leadership is becoming more selective
The call comes as the tone in U.S. equities has become more discriminating. Volatility in the Nasdaq and the Philadelphia Semiconductor Index has widened in recent sessions, while some previously strong AI-linked names have been hit by concentrated selling. Investors are also reassessing AI revenue realization, returns on capital spending, and pressure from higher long-end rates.
JPMorgan said that kind of volatility does not necessarily mean the bull market is over. In its view, it is more likely a sign that money is leaving crowded trades and moving toward areas with stronger earnings visibility and valuations that are better able to absorb current conditions.
Higher long-end yields seen as a signal of stronger capital demand
The bank also read the rise in long-dated U.S. Treasury yields as a sign that capital demand and investment opportunities are picking up. Spending tied to AI infrastructure, power grids, data centers, and cloud computing is absorbing large amounts of capital, and the market is expected to keep weighing growth opportunities against financing costs.
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