JPMorgan: Fed Rate Cuts Fully Priced In, U.S. Stocks May Face Profit-Taking Wave

On December 9, JPMorgan strategists stated that the recent rally in U.S. stocks may stall after a potential Fed rate cut, as investors move to take profits. In a report led by Mislav Matejka, the JPMorgan team wrote: “Investors may be more inclined to lock in gains before year-end rather than increase directional exposure. Rate cut expectations are already fully priced in, and U.S. stocks have returned to their highs.” The JPMorgan strategists maintained a bullish outlook for the medium term, saying that a dovish Fed would support U.S. stocks. Matejka wrote that, meanwhile, subdued oil prices, slowing wage growth, and easing U.S. tariff pressures will allow the Fed to ease monetary policy without fueling inflation. Other factors that could boost U.S. stocks in 2026 include reduced trade uncertainty, improved economic outlook in Asia, increased fiscal spending in the eurozone, and the rapid adoption of artificial intelligence in the U.S. (Jin10)