Wall Street Giants Warn Market Rally May Be Short-Lived
Analysts from JPMorgan Chase and Bank of America are raising red flags about the recent rally in U.S. equities, warning that the upswing may be fleeting.
While markets have enjoyed a short-term boost, particularly amid the cooling of tariff tensions, both financial giants caution that the underlying economic pressures have not yet fully emerged.
JPMorgan’s trading desk suggests that the current market momentum might continue in the absence of fresh negative catalysts like renewed trade Wall Street Giants Warn Market Rally May Be Short-Lived -conflict or bond yield spikes. However, they believe this optimism is fragile. With investors still on the sidelines, market participation low, and liquidity thin, they expect volatility to resurface as the delayed consequences of President Trump’s tariff policies start weighing on the economy—likely within the next couple of months.
Echoing this view, JPMorgan’s equity researchers advise taking profits rather than chasing market rallies, noting that a real shift in sentiment would require more than a short-term rebound—it would demand clarity on unresolved risks.
Bank of America offers a similarly cautious perspective. Its strategists warn clients not to rely on the current upswing, recommending they offload U.S. stocks and the dollar during any strength. They view the weakening dollar as a key signal that global investors are pulling capital away from the U.S., turning instead to commodities like gold and to international markets.
BofA also points out that unless the Federal Reserve lowers interest rates, a comprehensive trade deal with China is struck, and domestic spending remains robust, the dollar’s decline and capital outflows are likely to persist.
So far this year, the U.S. dollar index has dropped around 8%, marking its sharpest fall in over a decade. Meanwhile, the S&P 500 has gained approximately 15% since reaching a low point in early April, but both banks suggest that this rebound could lose steam if broader economic weaknesses begin to surface.
Editorial Team
Reporter at Coindoo
