JPMorgan Chase, the largest bank in the United States by assets, has told clients that the current selloff in American equities represents a buying opportunity — not the beginning of something worse. The call, made amid tariff-driven volatility and persistent macroeconomic uncertainty, is striking in both its confidence and its timing.
The bank’s analysts argue that the S&P 500’s recent decline has already priced in a meaningful economic slowdown, and that investors willing to stomach near-term turbulence will be rewarded. As Yahoo Finance reported, JPMorgan’s strategists see the current dip as an entry point rather than a warning sign, framing the pullback as a healthy repricing rather than the start of a prolonged bear market.
That’s a bold stance. And it arrives at a moment when consensus on Wall Street is fractured.
The S&P 500 has been whipsawed in recent weeks by escalating trade tensions between the United States and China, with the White House imposing sweeping new tariffs and Beijing retaliating in kind. President Trump’s tariff policies — some announced, some paused, some reversed within days — have injected a level of policy unpredictability that markets haven’t seen in years. Corporate earnings guidance has grown murkier. Consumer confidence readings have softened. The bond market has flashed intermittent distress signals. Against that backdrop, JPMorgan’s call to buy the dip carries real weight, precisely because the bank isn’t dismissing the risks.
Instead, the thesis rests on valuation. JPMorgan’s equity strategists believe that the market correction has compressed price-to-earnings multiples enough to compensate for the deteriorating macro picture. In their view, much of the tariff damage is already baked in. The argument isn’t that everything is fine — it’s that stocks have gotten cheap enough relative to earnings expectations that the risk-reward has shifted in favor of buyers.
This kind of call is what separates institutional research from retail sentiment. Retail investors, by and large, have been pulling money from equity funds. Institutional flows tell a more mixed story, with some large allocators quietly adding exposure to U.S. large-caps even as headlines scream caution. JPMorgan’s recommendation gives those allocators intellectual cover.
But not everyone agrees.
Goldman Sachs has been notably more cautious, warning clients that the tariff situation could deteriorate further and that earnings estimates for the second half of 2025 remain too optimistic. Morgan Stanley’s Mike Wilson, long one of the more bearish voices on the Street, has echoed that concern, arguing that margin compression is underappreciated and that the market hasn’t fully discounted a potential recession scenario. Citigroup’s strategists have taken a middle path, suggesting that while U.S. equities may be near a trough, the catalyst for a sustained rally isn’t yet visible.
So JPMorgan is out on a limb. Not recklessly — the bank hedged its call with caveats about trade policy uncertainty and the possibility of further downside if tariff negotiations collapse entirely — but meaningfully.
The tariff picture itself remains deeply fluid. The Trump administration’s 90-day pause on certain reciprocal tariffs, announced in early April, gave markets a brief reprieve. But the baseline 10% tariff on most imports remains in effect, and the rate on Chinese goods has climbed to levels not seen since the Smoot-Hawley era. Beijing has responded with its own escalating duties on American agricultural and industrial exports, and both sides appear to be settling in for a prolonged standoff rather than a quick resolution.
For corporate America, the uncertainty is arguably worse than the tariffs themselves. Companies can adapt to a known cost structure. They can’t plan around a tariff rate that might change via social media post at 6 a.m. on a Tuesday. That’s the core problem, and it’s one that JPMorgan’s analysts acknowledge without fully resolving. Their thesis implicitly assumes that the worst of the tariff escalation is behind us — an assumption that requires a certain faith in the administration’s willingness to negotiate.
Recent data complicates the picture further. The April jobs report came in stronger than expected, with nonfarm payrolls adding 177,000 positions and the unemployment rate holding at 4.2%. That’s good news on its face, but economists have noted that the labor market tends to be a lagging indicator, and that the full impact of tariff-related disruptions won’t show up in employment figures for months. Consumer spending, meanwhile, has shown signs of a pullback in discretionary categories — exactly the pattern you’d expect if households are bracing for higher prices on imported goods.
The Federal Reserve, for its part, has signaled patience. Chair Jerome Powell has emphasized that the central bank wants to see how tariff effects filter through the economy before adjusting interest rates. Markets are pricing in two to three rate cuts by year-end, but Fed officials have pushed back on that timeline, suggesting that inflation risks from tariffs could delay easing. That tension — between what the market expects and what the Fed is willing to deliver — is another source of potential volatility.
JPMorgan’s call to buy the dip implicitly bets that the Fed will eventually come around. If economic data weakens enough, the thinking goes, Powell will cut rates to support growth, providing a tailwind for equities. It’s a reasonable expectation. But it’s not guaranteed, especially if tariff-driven inflation proves stickier than anticipated.
There’s a historical dimension worth considering. In prior episodes of tariff-driven market stress — most notably during the 2018-2019 trade war with China — stocks did eventually recover, and investors who bought during the dips were rewarded handsomely. The S&P 500 fell roughly 20% from its September 2018 peak to its December 2018 trough, then rallied more than 30% over the following year. JPMorgan’s strategists are, in part, betting that this pattern repeats.
The analogy has limits. The current tariff regime is broader and more aggressive than anything implemented during Trump’s first term. The global trading system has also changed — supply chains that were rerouted after the first trade war can’t be easily rerouted again. And the fiscal backdrop is different, with the federal deficit running at levels that constrain the government’s ability to provide stimulus if the economy tips into recession.
Still, JPMorgan’s core argument has a certain logic. Valuations have compressed. Sentiment is washed out. Positioning is light. Those are the classic ingredients for a market bottom. The question is whether this time, the fundamental backdrop is deteriorating fast enough to overwhelm the technical setup.
One factor working in the bulls’ favor: corporate buybacks. With stock prices lower, companies sitting on large cash reserves have accelerated share repurchase programs. That provides a floor of sorts, absorbing selling pressure that might otherwise push prices lower. Several major tech companies have announced expanded buyback authorizations in recent weeks, and the pace of actual repurchases has picked up meaningfully according to S&P Dow Jones Indices data.
Another factor: the dollar. The greenback has weakened modestly against a basket of major currencies, partly reflecting foreign investor concerns about U.S. policy predictability. A weaker dollar, all else equal, boosts the earnings of multinational corporations by making their overseas revenues worth more in dollar terms. For a market dominated by globally exposed mega-caps, that’s a meaningful tailwind.
And then there’s the AI trade. Despite the broader market turbulence, spending on artificial intelligence infrastructure has shown no signs of slowing. Microsoft, Alphabet, Amazon, and Meta have all reaffirmed or increased their capital expenditure plans for AI-related investments. That spending flows through to semiconductor companies, cloud infrastructure providers, and a wide range of enterprise software firms. JPMorgan’s analysts have specifically cited the durability of AI capital spending as a reason to remain constructive on the technology sector, which accounts for roughly 30% of the S&P 500’s market capitalization.
The counterargument is straightforward: AI spending is great until it isn’t. If a recession materializes, even the most committed tech companies will trim budgets. And the valuations on AI-adjacent stocks, while lower than their peaks, remain elevated by historical standards. Buying the dip in Nvidia at 25 times forward earnings is a different proposition than buying it at 15 times.
For institutional investors parsing JPMorgan’s recommendation, the practical question is one of timing and sizing. Few large allocators are going to make an all-in bet on U.S. equities based on a single bank’s call. But many will use it as one input among several in their decision-making process. The bank’s research carries outsized influence precisely because of its scale — JPMorgan’s asset and wealth management division oversees more than $3.9 trillion — and because its strategists have a track record that commands attention, even when they’re wrong.
And they have been wrong before. In early 2022, JPMorgan’s equity strategists were broadly constructive on stocks heading into what turned out to be a brutal year for both equities and bonds. The S&P 500 fell more than 19% that year. The bank’s analysts adjusted their views as conditions deteriorated, but the initial call cost credibility with some clients. That history is relevant context for anyone evaluating the current recommendation.
What makes this moment particularly tricky is the sheer number of variables in play. Trade policy. Monetary policy. Fiscal policy. Geopolitical risk. Technological disruption. Any one of these factors could dominate the market’s direction over the next six to twelve months. The interaction effects between them are nearly impossible to model with precision.
JPMorgan is essentially making a probabilistic argument: given what we know today, the odds favor higher stock prices over the medium term. That’s not the same as saying stocks can’t go lower first. It’s not the same as saying the economy won’t stumble. It’s a statement about expected value, weighted across a range of scenarios.
For the average institutional portfolio manager, that framing is useful even if the specific conclusion is debatable. It forces a disciplined assessment of risk and reward at a time when emotional reactions — fear, paralysis, capitulation — are the biggest threats to long-term returns.
The next few weeks will test JPMorgan’s thesis. Earnings season is winding down, and the guidance that companies have provided has been cautious but not catastrophic. Trade negotiations between Washington and Beijing remain stalled, though back-channel communications reportedly continue. The Fed’s next policy meeting in June will provide another data point on the rate outlook.
If the tariff situation stabilizes and economic data holds up, JPMorgan will look prescient. If trade tensions escalate further or the labor market cracks, the call will age poorly. That’s the nature of making a directional bet in an environment defined by uncertainty.
One thing is clear: the biggest bank in America doesn’t think this is the beginning of a bear market. Whether that conviction proves well-founded will say a lot about where the economy — and the market — is headed for the rest of 2025.
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