S&P 500 gain this year defies rise in interest rates, says JPMorgan

JPMorgan’s Global Head of Macro Quantitative and Derivatives Strategy Marko Kolanovic says that while the S&P 500 Index is still up for the year, the gains are entirely from a handful of mega cap technology stocks, driven by the artificial intelligence narrative, and “defying the sharp rise in interest rates.” The firm’s framework continues to point to challenging macro fundamentals and headwinds for risky assets. This reasoning is based on market valuations, investor positioning, and various macro and geopolitical considerations, the strategist tells investors in a research note. JPMorgan believes the headwinds for risks are stronger, and tailwinds weaker, over the past six months. It still finds the risk/reward in equities and credit spreads unattractive relative to cash.