JPMorgan warns that US stocks could fall 10% due to Middle East conflict; the market is not yet prepared

Odaily Planet Daily reports that JPMorgan’s trading division states that the Iran conflict could cause the S&P 500 to drop as much as 10% from its high, and US stock traders are not yet prepared for this. Andrew Tyler, head of global market intelligence at JPMorgan, said on Monday that due to no signs of easing in the Middle East conflict and oil prices breaking above $100 per barrel, he has turned to a “tactical bearish” stance on US stocks. If a pullback occurs, it would mean the S&P 500 could fall about 10% from its peak to around 6,270 points, roughly 7% below last Friday’s close. Tyler stated that investors are currently not positioned for a decline, describing their overall stance as neutral and lacking extreme risk-off moves. Since traders expect the situation to ease, energy stocks were net sold last week. However, after production cuts in several Gulf countries, oil prices surged above $100 per barrel, raising concerns about long-term supply shocks and stagflation risks. Tyler believes that if the conflict does not persist, these risks could quickly diminish. “Once there is a clear path to de-escalation, this tactical view will end, as the underlying macro fundamentals still support risk assets.” (Jin10)