JPMorgan Strategists: U.S. Stock Market Overpricing Rate Hike Risks

According to JPMorgan Chase strategists led by Mislav Matejka, on May 26, the market has overpriced the risk of potential interest rate hikes from the central bank, creating conditions for a rebound in low-volatility stocks such as consumer staples and utilities.

The JPMorgan team noted in a research note that given the current macroeconomic environment differs significantly from 2022, they expect both bond yields and oil prices to decline over the next 6 to 12 months, amid expectations that all conflict parties will seek an exit. The strategists also predict corporate earnings will remain strong and do not view stagflation as the most likely macro scenario for the second half of 2026.