JPMorgan strategists maintain a positive outlook on global stock markets, forecasting that the rally will broaden in the second half of the year. They anticipate that cyclical stocks will regain their leadership position and outperform low-volatility stocks as corporate earnings and economic activity indicators improve.

The team, led by Mislav Matejka, stated in a report that they expect indices to reach new highs in the coming months. They noted that positioning is far from extreme levels and that the second-quarter earnings season has been reassuring.

Within the cyclical space, the strategists are focusing on banks, luxury goods, building materials, mining, industrials, and cyclical consumer sectors. They also favor emerging markets and the eurozone. While the recent momentum in technology and semiconductor stocks may fade, these sectors are expected to stabilize but will not lead the market rebound. The firm is less favorable toward energy, consumer staples, software, and media stocks.

Inflation risks are lower than in 2022, and softening labor market data could ease pressure on the Federal Reserve. A weaker US dollar is expected to provide support for equities, particularly international markets.