by Julien Ponthus
Yahoo! Finance
(Bloomberg) — Higher prices and weaker US economic growth over the summer are likely to threaten the S&P 500’s rally, according to JPMorgan Chase & Co. strategists.
“Post the recent bounce, we think softer leg is in store next, which could resemble a bit of a stagflationary episode,” the team led by Mislav Matejka wrote in a research note.
The threat of stagflation and continued uncertainty over trade negotiations between the US and its biggest partners will keep stocks in check in the coming months, according to the strategists. They also said the “current tariffs picture is worse than most thought at the start of the year.”
The bearish prediction comes after the S&P 500 just finished its best month since 2023, but the worries have returned about global trade tensions and a ballooning US budget deficit. The US benchmark is up 0.5% so far this year, underperforming European and Asian shares.