JPMorgan Warns S&P 500 Could Remain Range-Bound This Summer After 16% Rally Since Trump's 'Liberation Day' Tariff Pause

JPMorgan has warned that investors expecting a rally in U.S. equities should temper their expectations, stating that the S&P 500 index could be range-bound this summer.

The S&P 500 was up 2.04% at the time of writing.

According to a report by CNBC, Fabio Bassi, JPMorgan’s head of cross-asset strategy, warned that there could be limited short-term upside in the S&P 500 index.

“The rally to our bull case scenario of 5,800 for S&P 500 has played out, but from here we expect a consolidation and range-bound dynamic,” Bassi said in a recent note.

Contributing to the limited upside scenario is the Federal Open Market Committee’s (FOMC) cautious stance on interest rates due to the uncertainty induced by President Donald Trump’s tariffs.

While inflation concerns have prompted the Fed to adopt a wait-and-see approach to interest rates, the central bank has also flagged concerns about growth.

As such, some, like Boston Federal Reserve President Susan Collins, think there is a possibility of no interest rate cuts in 2025.

The S&P 500 index has also surged more than 16% since President Trump announced a pause in his “Liberation Day” tariffs on April 9.

In light of this, Bassi said, “Investors are expected to continue paying a premium for high-quality growth companies, resulting in an unhealthy concentration within the tech sector and the Mag7.”

Bassi advises investors to hedge against a potential downside by buying call options of the CBOE Volatility Index (VIX), also known as the “fear gauge.”

Meanwhile, the SPDR S&P 500 ETF (SPY), which mirrors the S&P 500 index, was up 2% at the time of writing.

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Also See: Tesla Hits A Speed Bump In Europe With Sales Plummeting 49% As CEO Elon Musk’s Politics, Rising Competition Hurt EV Giant

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