JPMorgan advises investors to cut net long positions, citing uncertain risks including expectations of Federal Reserve interest rate hikes.

JPMorgan’s trading desk has shifted to a "tactically cautious" short-term outlook, warning markets may become "more volatile" over the next two to three weeks. The desk noted a sharp correction at the index level is unlikely, but more turbulence could hit sectors and individual stocks. On risk factors, it cited lingering Federal Reserve policy risks in September and beyond, adding that positioning signals currently provide no clear direction. Corporate credit bond issuance is likely to pick up again after the Labor Day holiday, and September is historically a month of higher seasonal volatility for U.S. stocks. Based on this assessment, JPMorgan’s trading desk advised investors to reduce net long exposure and consider adopting a market-neutral strategy. The desk explained that in a period of unclear directional calls and dense macro event windows, portfolios should reduce reliance on one-sided upside bets.