Stock market sell-off has 'further to go,' JPMorgan warns

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JPMorgan analysts warned in a note to clients this week that the U.S. stock market sell-off has 'further to go' amid a number of macroeconomic headwinds.

The recent slump in the U.S. stock market is likely to be the start of a deeper sell-off, according to JPMorgan strategists. Although stocks rebounded at the start of the week, the market still faces a slew of macroeconomic risks, JPMorgan's chief market strategist Marko Kolanovic wrote in a note on Monday. Those headwinds include dwindling expectations the Federal Reserve will cut interest rates this year, signs of sticky inflation and higher-than-average equity valuations.

7% and the S&P 500 climbed 0.9%. Equities appeared poised to continue those gains on Tuesday morning. But Kolanovic suggested the gains are unlikely to last, comparing the current market outlook to that of summer 2023. "The current market narrative and patterns are increasingly resembling those of last summer, when upside inflation surprises and hawkish Fed revisions drove a correction in risk assets, but investor positioning now appears more elevated," he wrote.

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