JPMorgan Urges Investors to Capitalize on Market Dips Amid Global Volatility

Key Takeaways

Table of Contents

JPMorgan recommends investors with 3–12 month investment timelines accumulate positions during market downturns
Strategist Mislav Matejka cautions against adopting overly pessimistic outlooks amid current geopolitical uncertainties
Earnings projections for the S&P 500 continue their upward trajectory
JPMorgan favors global equities, emerging market exposure, smaller capitalization stocks, and value-oriented investments
The financial institution highlights key differences between 2026 and 2022 regarding inflation dynamics and employment trends

JPMorgan released an investment note this Monday advising market participants to view any fresh market declines as strategic entry points. According to the firm, the fundamental conditions supporting a sharp market rebound are already established.

Mislav Matejka, who serves as JPMorgan’s European strategy chief, authored the analysis. He recommended that investors operating on a three-to-twelve-month timeframe should increase their market exposure during selloffs rather than retreating to the sidelines.

Matejka acknowledged current geopolitical challenges, including escalating tensions surrounding the Strait of Hormuz and the continuing Iran situation. While he recognized that military confrontations generate market instability, he emphasized that maintaining a persistently negative stance carries significant risk of missing subsequent rallies.

JPMorgan observed that pessimistic market sentiment had become widespread approximately two to three weeks after the conflict intensified. Market participants widely anticipated oil prices would surge dramatically, prompting many investors to significantly decrease their equity allocations.

According to the bank, this positioning dynamic, coupled with technical indicators showing oversold conditions, presented an ideal moment to increase holdings. JPMorgan initially issued this buy recommendation on March 23.

Contrasting 2026 With 2022 Market Conditions

Matejka outlined several fundamental distinctions between today’s environment and the 2022 period. Inflationary forces are considerably milder, companies possess diminished ability to raise prices, and salary increases are being constrained partially through artificial intelligence implementation.

Interest rate conditions and employment market dynamics also diverge significantly from 2022, when pandemic-related disruptions complicated inflation management. Consequently, JPMorgan advocates for long-duration investments that respond favorably to interest rate fluctuations.

The institution believes monetary authorities will likely tolerate an anticipated 1.5 percentage point increase in annual inflation rates. Matejka expressed confidence that inflation expectations remain firmly “anchored.”

Earnings per share forecasts for the S&P 500 through 2026 have maintained their upward momentum. The ISM manufacturing index, a key US economic barometer, recently recorded its highest readings in three years. European corporate earnings growth could potentially achieve 18.2% expansion this year.

The Citigroup Economic Surprises Index currently reflects strongly positive readings, the note highlighted.

JPMorgan’s Preferred Investment Areas

JPMorgan anticipates that international equities and emerging market securities will regain their outperformance versus US stocks. The firm also prefers smaller capitalization companies and value-oriented investments over growth stocks.

Prior to the Iran-related tensions, international markets had already delivered 11% superior returns compared to US equities. JPMorgan projects this performance pattern will reemerge during the latter half of 2026 as military conflicts subside and the dollar’s defensive appeal diminishes.

Emerging market stocks continue trading at a substantial 34% valuation discount relative to developed market equivalents. MSCI Europe currently trades at 14 times projected 2026 earnings, while the S&P 500 commands a 19.5 times multiple.

Matejka indicated that capital flows into emerging markets, which paused during the geopolitical turmoil, should restart. The bank’s relative performance analysis suggests new market peaks in the year’s second half.

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