Written by: Rita

Interest rates are rising, exchange rates are fluctuating, and oil prices are climbing, yet JPMorgan says U.S. stocks should continue to be bullish. On September 6, JPMorgan released a theme report on the Asia-Pacific market, presenting four core reasons regarding the recent macro fluctuations troubling U.S. stock investors: strong growth, not overly high interest rates, a weak dollar inclination, and neutral to light hedge fund positions. The 162,000 jobs added in August far surpassed expectations, but the true suspense over whether to raise interest rates in September is in the CPI on September 11.

JPMorgan believes that despite rising macro volatility, the attractiveness of equity assets has not diminished. The global PMI suggests a growth rate exceeding 3%, EPS is in an upward revision cycle, and the MSCI World Index has risen about 12% year-to-date, with the 10-year U.S. Treasury yield rising only 60 basis points. Profit growth is absorbing valuations rather than being driven by bubbles. The report also mentions potential risks from the German elections and shifts in European trade policy, but for U.S. stock investors, the core focus remains on growth resilience, interest rate paths, and position structures.

Strong Growth, EPS Upward Revision Cycle Not Over

Growth is the first pillar for being bullish on U.S. stocks. In the first half of 2026, U.S. growth is expected to reach 2.5%, with JPMorgan forecasting an even stronger performance in the second half (2.6%), with risks skewed to the upside. The August global PMI indicates growth exceeding 3%, covering multiple industries and regions.

Even with pressure from oil prices nearing $100, and concern over rising interest rates, growth is the core variable for equity assets. The addition of 162,000 jobs in August was more than 100,000 higher than market consensus, and GDP and EPS forecasts are in an upward revision channel. The strong performance of employment data further confirms the resilience of the economic fundamentals, and the labor market has not shown the substantial cooling that the market previously feared.

From a profit perspective, the median EPS for S&P 500 companies grew 14% year-on-year in the second quarter, and profitability in other sectors, excluding AI infrastructure companies, also reached a new high in this cycle. JPMorgan believes that the earnings recovery is spreading, providing the firmest fundamental support for U.S. stocks. Profit growth is the true driver of stock price increases, not valuation bubbles.

Interest Rates Reflect Growth, Not Yet a Cycle Drag

The speed at which yields rise is more important than the absolute level. Recently, the main driver of rising long-end rates has been strong growth, not uncontrollable inflation or fiscal deterioration. JPMorgan's interest rate strategists expect the pace of the rise in the 10-year U.S. Treasury yield to slow, with a year-end target of 4.85%.

A regression analysis shows that the current 10-year U.S. Treasury yield is essentially in line with potential growth levels. Despite heated discussions about a 6% deficit rate and a $40 trillion federal debt, the current rise in yields is fundamentally driven by growth, which is a positive signal for U.S. stocks rather than a warning. When rising yields are driven by growth, corporations' pricing power and earnings outlook improve in tandem, enhancing the attractiveness of equity assets.

JPMorgan believes that the critical point for interest rates to become a cycle drag on the economy has not yet been reached. Although rising rates increase financing costs, the magnitude of corporate earnings improvements is sufficient to offset this impact. The key threshold lies in the speed of rising rates, which is currently still within a manageable range.

Weak Dollar Favorable for U.S. Multinational Corporations

JPMorgan believes that although the Trump administration nominally maintains a "strong dollar" policy, the actual policy inclination is towards lowering rates and weakening the dollar to improve U.S. competitiveness.

A weak dollar supports the overseas revenues of U.S. technology and multinational companies. A weaker dollar means that tech giants (about 50% to 60% of their revenues come from overseas) gain foreign exchange benefits when converting their overseas profits back into dollars, directly boosting their dollar-denominated EPS.

Hedge Fund Positions Neutral, Leaving Room for Increases

Hedge funds’ overall positions are neutrally light, providing a clean starting point for subsequent increases. After 2 to 3 months of deleveraging, JPMorgan’s U.S. tactical position monitoring indicator remains at a low level of 40% (-0.2 standard deviations), with a net exposure of global hedge funds at only 40% to 50% (over a five-year dimension).

In terms of industry style, the allocation of cyclical stocks relative to defensive stocks is also neutral. The past week has shown some initial signs of increased allocation, but this is only reflected at the total position level, with no follow-up in net positions. This position structure suggests that the market still has ample buying power waiting to be released, and once macro uncertainty dissipates, there is significant room for funds to flow back into the stock market.

Historically, when hedge fund net exposures are in the 40% to 50% range, the following 6 to 12 months of equity asset returns tend to be positive. The current position levels are neither crowded nor extreme, providing technical support for further upside in U.S. stocks.

Focus in September on CPI

The addition of 162,000 non-farm jobs in August far exceeded expectations, raising the probability of a September rate hike, putting pressure on U.S. stocks (S&P 500 fell 0.5%). JPMorgan believes that Warsh has clearly indicated that there is no conflict in the dual mandate (the unemployment rate is already very low), and the real determinant of whether to raise rates in September is the CPI data on September 11. JPMorgan expects core CPI to rise 0.21% month-on-month; if this expectation is met, the probability of a rate hike will decline.

The market has priced the probability of a September rate hike from about 30% before the non-farm payrolls to slightly over 50%. If CPI data shows mild inflation, expectations for a rate hike may quickly cool, and U.S. stocks may see a rebound window. Conversely, if CPI rises unexpectedly, a September rate hike may become a reality, putting pressure on growth stock valuations in the short term.

Allocation Suggestions

JPMorgan recommends maintaining an overweight allocation to U.S. stocks, AI technology, and gold. AI infrastructure investment remains a main line throughout the cycle, with capital expenditures from ultra-large vendors expected to grow by 60% by 2027; although the growth rate will slow in 2028, absolute expenditure levels remain high.

September is packed with key meetings; the FOMC (on the 16th) is expected to stand pat, the European Central Bank (on the 10th) is projected to raise rates by 25 basis points, and the Bank of England (on the 17th) and the Bank of Japan (on the 18th) are predicted to stand pat and raise rates by 25 basis points, respectively. CPI data (on the 11th) will provide short-term directional guidance.

On the risk front, two points need attention: if CPI rises unexpectedly, a September rate hike could suppress growth stock valuations. Furthermore, escalated European trade protection policies may impact the overseas revenues of some U.S. export-oriented companies, particularly in the automotive and industrial sectors. JPMorgan believes that the current risk-reward ratio of U.S. stocks remains tilted positively.

Disclaimer

This article is a整理与解读 of third-party brokerage reports (JPMorgan, September 6, 2026) by潮向研究, combined with整理 of publicly available market information. The ratings, target prices, earnings forecasts, and related judgments quoted in the text are the views of the analysts from that brokerage and only represent their institution's stance, not that of潮向研究, and do not constitute any investment advice.

Markets carry risks, and decisions should be made independently. This article should not be used as a basis for buying or selling any securities.