JPMorgan Frames Tech Selloff as Healthy Rotation into Cyclicals

JPMorgan strategists view the recent technology selloff as a healthy, strategic market rotation, not instability.

The bank's analysis shows capital shifting from overvalued technology. This capital moves into economically sensitive sectors, including industrials and power. These sectors are poised to benefit from an accelerating domestic economy.

Investor fears triggered the shift, citing vulnerability of software and data services to new AI advancements.

JPMorgan believes this volatility represents a corrective period and a positive market evolution. This creates opportunities in overlooked cyclical stocks.

Strategists also noted a global component to the rotation. They hold particular conviction in international markets, specifically Asia (excluding Japan).