JPMorgan is flagging notable shifts beneath the surface of the US stock market, urging investors to stay alert. The firm believes the overarching trend has not yet reversed, but a combination of diverging AI-related stocks, firmer technical resistance, and seasonal headwinds could make September a pivotal moment for reassessing portfolio risk.

The bank cautions that while US equities remain close to record highs, multiple warning signs are emerging in market internals. Technical strategist Jason Hunter suggests investors could reasonably trim equity exposure slightly, but there is no need for aggressive risk reduction at this stage. Hunter notes that major benchmarks like the S&P 500 remain in a "bullish trend" without a clear topping signal just yet.

However, shifts in internal market structure, sector rotation, and technical patterns indicate that US stocks may face increasing pressure between late summer and early autumn. Historical data shows that August through October tends to be a weaker stretch for equities. According to Bank of America, the S&P 500 has averaged a 0.02% decline during this period since 1928, with average drawdowns of 7.35% in down years. This seasonal softness becomes even more pronounced in midterm election years. Goldman Sachs data reveals that since 1974, the median return for the S&P 500 from August 1 through Election Day in November during all midterm years has been 0%.

"We are not going to aggressively reduce risk right now, but we advise investors to keep using trend-following stop-loss strategies. If the current environment persists, we will consider lowering equity exposure before early September," Hunter said.

Despite the risk warning, JPMorgan maintains a constructive long-term outlook on US stocks and has lifted its year-end target for the S&P 500 to 8,000 points. Still, the bank points out that the current AI rally shares certain similarities with the dot-com bubble era of 2000, especially as cracks appear within the AI supply chain itself.

AI stocks are under pressure, with Nvidia's earnings becoming a key focal point. Hunter notes that while the S&P 500 recently set a fresh all-time high at 7,816 points, it remains below the key resistance zone of 7,909 to 7,935 points. The index is still holding above the support band of 7,521 to 7,620 points.

JPMorgan is closely watching the performance gap between AI hardware makers and large cloud computing companies. The bank believes this divergence mirrors market conditions seen before the peak of the communications equipment capital investment cycle in 2000. Recent market action has reinforced these concerns. On Monday, US tech stocks weakened, with the semiconductor sector acting as a major drag. Nvidia (NVDA.O) fell 2.9%, Micron Technology (MU.O) dropped 5.8%, and Broadcom (AVGO.O) slid 2.6%, pulling the Philadelphia Semiconductor Index lower.

Investors are now awaiting Nvidia's earnings report to gauge whether AI infrastructure spending can still justify current valuations. If results or forward guidance fall short of expectations, the market may need to reassess the durability of the AI trade. Meanwhile, the AI industry is also facing policy headwinds. Some US regions have begun scrutinizing the energy demands of expanding data centers. Texas Governor Greg Abbott recently paused approvals for new data center projects and ordered a review of their impact on grid stability.

Ohsung Kwon, chief equity strategist at Wells Fargo, says that political resistance surrounding AI and data centers is an important risk to monitor as the market enters the midterm election cycle.

Several sectors are approaching technical resistance levels. Beyond AI, recently strong value stocks and financials are also nearing key resistance zones. Over the past month, the S&P 500 Value Index and the financial sector have each gained roughly 2% and have held above their 50-day moving averages during the tech pullback. But Hunter believes these groups are now approaching technical barriers such as long-term trendlines, price channels, and Fibonacci targets, which could limit further upside.

"We expect these indices to slow down near resistance zones and enter a consolidation and mean-reversion phase in the autumn," he said.

Software and semiconductor stocks are also drawing attention. The S&P 500 software industry index is hovering near the resistance zone of 7,749 to 8,078 points, while the Philadelphia Semiconductor Index is stalling around 12,362 to 13,047 points. Hunter warns that if these key levels are not broken, the related sectors could face additional selling pressure.

JPMorgan is concerned that the risk in the current AI trade is not simply a rotation from hardware names into cloud companies, but rather a broader sell-off across the entire AI-themed asset complex.

Interest rates and September events are becoming critical market variables. Beyond technical factors, pressure in the Treasury market is also affecting investor sentiment. The 30-year US Treasury yield recently climbed to levels near 19-year highs, keeping focus on government debt burdens and the future path of interest rates.

Looking ahead, Nvidia's earnings, remarks from Federal Reserve Chair Warsh at the Jackson Hole symposium, and the Fed's preferred PCE inflation reading will all be key market catalysts. For now, JPMorgan does not believe the US equity uptrend has ended, but with indices at elevated levels, the AI investment boom continuing, and seasonal momentum turning less favorable, September could serve as an important window for investors to reassess risk.