JPMorgan sends tough message to investors about market weakness

The markets have been under pressure for weeks. The feeling has changed. Most investors have already reduced their risks. That was exactly when JPMorgan decided to publish its latest note.

In a note published on April 13, JPMorgan strategist Mislav Matejka laid out the bank’s clearest position yet on what investors should be doing right now, arguing that conditions support another V-shaped recovery, despite the current geopolitical uncertainty.

“Our base case remains that any further escalation is unlikely to sustain indefinitely, and that dips driven by geopolitical shocks should ultimately prove to be buying opportunities,” Matejka said, according to Reuters.

Matejka’s key argument is that the current sell-off appears to be driven by fear, not fundamentals. Bearish sentiment had become the consensus view just two to three weeks after the conflict, with oil prices expected to rise further and investors being very risk-off, according to Yahoo Finance.

JPMorgan’s view is that this kind of sentiment capitulation is itself a sign. When everyone has already sold, the risk of getting caught on the wrong side of a rally becomes the biggest danger.

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“Military conflicts inherently show fat tails and generate high volatility, but we were against succumbing to bearish views as the risk of getting hit increases significantly,” Matejka wrote.

JPMorgan first made this call on March 23. The bank held it during the subsequent volatility, according to Yahoo Finance.

Matejka was direct about why 2026 is not a repeat of 2022. He said the current environment differs significantly in terms of inflation pressures, corporate pricing power, real rates and the labor market.

S&P 500 earnings per share estimates for 2026 have continued to rise during the conflict. JPMorgan also said central banks should consider an expected 1.5 percentage point increase in year-over-year inflation, viewing it as a temporary increase rather than a structural change, according to Yahoo Finance.

The global economy came into conflict with relatively solid fundamentals, including solid momentum in activity and earnings growth. That context makes a sustained bear market harder to justify.

JPMorgan is not calling for broad, indiscriminate purchases. The bank recommends cyclical sectors including capital goods, semiconductors and consumer cyclicals, as well as emerging markets and the eurozone.

The bank also expects international stocks, emerging markets, small caps and value stocks to once again outperform, in line with its outlook for next year, according to Yahoo Finance. Those are the areas JPMorgan believes were oversold during the conflict-driven rotation into defensive assets.

• Time horizon for adding risk: 3 to 12 months

• First call to “add exposure”: March 23, 2026

• Fall of the S&P 500 since the war began: About 8% at its worst, notes Investing.com

• S&P 500 Recovery from March Low: About 8%, according to Investing.com

• JPMorgan S&P 500 Year-End Goal: 7,200

• Favored sectors: Capital goods, semiconductors, consumer cyclical goods

• Favored regions: Emerging markets, eurozone

JPMorgan is not alone. Morgan Stanley strategists, led by Michael Wilson, said the S&P 500’s recent selloff looks more like a correction than the start of a prolonged slowdown, and attributed the support to improving earnings fundamentals.

The alignment between both banks on this point is notable. When multiple major institutions come to the same conclusion about a market dislocation, it tends to carry more weight than a single outlier decision.

The bank’s bullish stance comes with a clear caveat. If the conflict escalates further, oil volatility persists, or the situation begins to damage growth and supply chains in a more lasting way, the recovery thesis weakens.

JPMorgan already cut its year-end target for the S&P 500 from 7,500 to 7,200, reflecting the uncertainty. The decision to “buy the dip” is tactical, not a sign that everything is clear. It is based on the assumption that the conflict remains contained and that the macroeconomic context remains the same.

For investors, JPMorgan’s message is simple. You can’t do volatility. But if the sell-off is driven by fear rather than deteriorating fundamentals, the biggest risk may be on the sidelines when the market turns.

Related: JPMorgan identifies huge investment opportunity

This story was originally published by TheStreet on April 14, 2026, where it first appeared in the Investments section. Add TheStreet as a preferred source by clicking here.