S&P 500, Nasdaq Hit Fresh Record Highs – Here’s Why JPMorgan Says The Rally Isn’t Over

Even as the S&P 500 and the Nasdaq Composite hit another record intraday high on Thursday, and meme-stock frenzy is the talk of the town, JPMorgan’s trading desk reportedly expects the relentless rally in U.S. equities to continue.

The S&P 500 climbed nearly 0.3% and reached an intraday high of 6,379.54, as of the time of writing. Meanwhile, the Nasdaq Composite rose more than 0.25% to hit 21,107.83.

The SPDR S&P 500 ETF (SPY) gained 0.09%, while the Invesco QQQ Series 1 Trust (QQQ), which tracks the tech-heavy Nasdaq 100, climbed 0.14%. On Stocktwits, retail sentiment around SPY remained in ‘neutral’ territory over the past day, and retail sentiment around QQQ stayed in the ‘bullish’ zone.

“While bullishness is not yet consensus, client conversations reveal that even those that skewed bearish are throwing in the towel,” said Andrew Tyler, JPMorgan’s Global Head of Market Intelligence, in a note cited by Bloomberg ahead of the market open on Thursday.

According to the report, JPMorgan stated that recent progress in trade deals, positive economic data, and an uptick in M&A activity are expected to continue pushing the market higher.

Tyler also noted that, on the technical side, the rally is being supported by traders struggling to hold short positions as momentum fades and meme stock rallies intensify. 

He believes that the market could even take a “significant step higher” if the macroeconomic data maintains its strength and President Donald Trump can lock in deals with the EU and China. 

While the S&P 500 has consistently been hitting fresh highs, it’s been a melt-up into those highs led by the Magnificent Seven (MAGS). Thursday’s rally was driven by optimism after Alphabet’s latest earnings report.

Tyler suggested buying big tech, cyclical stocks, and high-risk names, while protecting against downside with S&P 500 puts and Cboe Volatility Index (VIX)-linked products.

Read also: Trump Asserts He Doesn’t Intend To ‘Destroy’ Elon Musk’s Companies, Wants US Firms To ‘Thrive’

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