JPMorgan's Tyler Turns Bullish on Tech After Month of Caution

Andrew Tyler's market intelligence team at JPMorgan has flipped tactically bullish on stocks just a month after urging caution — and tech is its top pick.

The reversal came in a desk note dispatched to clients on Monday, Sept. 29. At the end of August, the same team turned neutral, flagging widening credit spreads, Federal Reserve uncertainty, heavy positioning, weak September seasonality and the risk of the AI momentum trade unwinding. That cautious stance came with a trade attached: long the Nasdaq, short the Russell 2000. The pair trade delivered a 7.9% return in four weeks.

Now the calculus has changed. Tyler's team, which runs JPMorgan's short-term tactical strategy built on daily sentiment, order flows and positioning data, identifies a more favorable setup as September's weak seasonality fades, bond markets look better positioned to rally and oil prices trend lower.

The macro case anchors the call. Flash purchasing manager index surveys have come in hotter than expected. The last composite PMI showed the strongest growth since 2015, excluding the Covid period. Tyler argues that S&P 500 earnings-per-share growth forecasts track nominal GDP expansion closely — which implies analysts may need to revise earnings estimates upward.

The American consumer reinforces that story. Spending continues to defy expectations, and consumers still demonstrate an ability to absorb higher inflation and interest rates, according to the JPMorgan team.

Earnings deliver the strongest numbers of all. Analysts expect a 29% year-on-year gain for third-quarter earnings, a figure the JPMorgan team says may yet prove conservative. Even if the consensus lands exactly on target, it would mark the third consecutive quarter of 10%-plus revenue growth and 25%-plus earnings growth.

The rates picture supports equities too. Jay Barry, JPMorgan's global rate strategist, predicts U.S. 10-year Treasury yields will fall from current levels to 5.05% — 20 basis points lower — by year-end.

Near-term catalysts matter to a tactical desk. Tyler thinks inflation and payrolls data due this week may reinforce sentiment, especially if the jobs print resembles August's and buttresses the growth narrative.

Tech is where Tyler is most bullish. He points to the release of Meta's Muse and OpenAI's developer day this week as potentially useful catalysts for the sector. Within tech, he expects semiconductor plays and the Mag7 complex to outperform, and he advocates continuing to own AI-related stocks.

The message to clients is a measured one: a hedge that worked during a cautious September has given way to outright risk appetite, provided the data this week cooperates. If Tyler's growth read holds, the third-quarter earnings season starting in October becomes the test of whether a 29% expected profit gain is a floor rather than a ceiling.