- JPMorgan's trading desk turned "tactically bullish" after weeks of caution, citing improving macro fundamentals, consumer strength, earnings expectations, stabilizing bond yields, and supportive technicals.
- The 10-year Treasury yield topped 5.3% last week, its highest since 2002, and the 30-year reached levels not seen in 24 years before easing on lighter-than-expected US inflation and employment data.
- JPMorgan traders favor tech as a core long on the persistent AI theme and like banks on a potential Treasury curve steepening and favorable capital markets outlook.
- QQQ traded near $739, fading an early tech rally and sitting 1.2% below its June 3, 2026 record of $748.65, as the ISM manufacturing prices index surged to 77.9 and the 10-year yield touched 5.34%.
- The muted stock reaction to Micron's exceptional earnings signals AI optimism is fully priced into leading names, leaving QQQ range-bound below its record until payrolls data or late-October earnings provide direction.
Quotes
“After a rapid move higher in yields earlier in the week, bond yields stabilized, and we saw a sharp decline in both October rate-hike expectations”
“The moves in yields have concentrated markets and a broadening will be supportive for investor sentiment, which likely requires bond yields to hold or move lower.”
“by a more constructive market setup based on improving macro fundamentals, consumer strength, earnings expectations, stabilizing bond yields, and supportive technicals”
“The muted stock reaction to Micron's exceptional earnings also suggests that AI optimism may be fully priced into leading names”