JPMorgan: The AI sector is unlikely to be the main driver of returns in the second half of the year

J.P. Morgan strategists believe that as market performance spreads to more sectors, technology stocks or AI-related stocks are unlikely to be the main drivers of market returns in the second half of the year.

The team led by Mislav Matejka stated that the sell-off in momentum trading is likely mostly over, and semiconductor stocks are currently close to oversold levels. The team wrote in the report: "As earnings momentum remains upward, this should help stabilize the related stocks." However, they expect market performance to continue spreading to more sectors and reiterated that due to geopolitical tensions, investors are advised to buy on dips.