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S&P 500 Signals Rebound Amid Tech Sell-Off
2 Nov
Summary
- Market breadth in the S&P 500 shows improving signs.
- Over 50% of S&P 500 stocks hit a new 20-day high.
- JPMorgan predicts outsized market gains post-elections.
Amidst a significant tech sector sell-off, JPMorgan Private Bank has identified an improving market breadth within the S&P 500 as a positive indicator for future market performance. This resurgence in breadth, marked by over 50% of stocks reaching a 20-day high, is the strongest signal since the second quarter of 2025.
Historically, such increases in market breadth have preceded notable market gains over the subsequent three and six-month periods. JPMorgan has raised its year-end S&P 500 target to 8,000, forecasting a 5% increase.
Strategists from JPMorgan's private bank arm suggest that the US stock market is poised for substantial returns following the midterm elections, despite a crowded risk calendar. This outlook contrasts with recent market turbulence, which has seen the Nasdaq 100 decline significantly from its October peak.
The broader market concerns, particularly around artificial intelligence spending, have impacted various tech sectors, including semiconductors and cloud computing. However, the upcoming midterm elections are viewed by many analysts as a potential catalyst for renewed stock market rallies, with historical data showing average S&P 500 gains of 14% in the six months post-midterms since 1970.
