Recently, the US stock market has been a bit "rumored", especially technology stocks have pulled back one after another, and many investors have begun to wonder: Is it going to rise for too long and the sky is about to change?

According to the latest research and judgment of JPMorgan's market intelligence team, this wave of technology stock decline may not be the beginning of the "ebb tide", but an opportunity to "get on the bus". They made it clear that the recent pullback in technology stocks has created a good opportunity to buy on dips. But whether you can start depends on two "key variables".

Don't let "stagflation" kill a horse gun

The first thing to keep an eye on is the "stagflation signal". The economic downturn and inflation are rising, and this combination of punches is the most troublesome for the market. Once confirmed, it will be difficult for the Fed to cut interest rates, and the stock market will be under pressure.

What do you look at? The preliminary PMI value to be released, if it is too bad, indicates that the economy is slowing down. The deterioration of unemployment data, as well as Fed Chairman Powell's speech at the Jackson Hole central bank annual meeting, could immediately cool market sentiment if he spoke "hawkish" (i.e., emphasizing inflation risks and not rushing to cut interest rates).

In a word: the weaker the data + the harder Powell, the heavier the stagflation concerns and the harder it is for tech stocks to rebound.

The second variable, more important than the central bank's speech: Nvidia's earnings report next week. JPMorgan Chase & Co. pointed out that the importance of this Nvidia earnings report even exceeds that of the Jackson Hole annual meeting.

Why? Because Nvidia is not just "a company", it is the "weather vane" of the entire AI investment theme. Its financial report performance is directly related to: Is the demand for AI computing power still strong? Is data center growth sustainable? How is the next generation of chips going?

If the earnings report is strong, the AI narrative will be reignited, and technology stocks are expected to rebound strongly; If it falls short of expectations, the entire AI sector may be "half cool".

What does JPMorgan Chase think of this wave of "rotation"?

Recently, there has been a voice saying that funds are shifting from technology stocks to cyclical stocks, value stocks and small and medium-cap stocks, and the style is about to switch. JPMorgan's view is sharp: this is not a real "rotation", but more like a "short breath under bearish sentiment" in the market.

Their logic is: if it is really a style switch, it should be technology stocks falling and other sectors rising. But the reality is that technology stocks have fallen, and other sectors have not risen much, indicating that the market as a whole is cautious and has not yet formed a new main line.

Therefore, this is more like "taking a breather after rising more" rather than "changing the track".

| Who is "wrestling"? Momentum stocks and AI stars collectively pulled back

Last week, the U.S. stock market showed significant structural differentiation.

The S&P 500 index experienced its worst one-day decline in nearly three weeks, and the Nasdaq is heading for its biggest two-day decline since April. At the heart of this round of correction was the pullback of momentum factors and the sell-off of AI concept stocks, while the European and Asian markets recorded significant outperformance, mainly because technology stocks accounted for a small proportion of these markets.

It is worth noting that U.S. stock momentum stocks continued to be under pressure on Wednesday, with Goldman Sachs' high beta momentum basket now falling to a level that has been flat since 2025 after hitting a record high just two weeks ago.

Judging from historical data, this adjustment is actually not outrageous. The current momentum factor has retraced about 7% overall, while the average magnitude of the last five similar pullbacks has been 8.3% (median 8.5%, range 4.5%-13%). In other words, this time it didn't fall much, and it was still within the range of "normal fluctuations".

Don't panic as soon as it falls, the market will always move forward in "rise-adjust-rise again".

Why did you suddenly "turn off"? JPMorgan Chase & Co. summarized three key words: Valuation is too high: The stock prices of many technology leaders have overdrawn their growth expectations for the next few years.

The position is too crowded: stocks that "everyone is buying" are often the easiest to "run together". Once someone withdraws first, it is easy to trigger a chain reaction and form a "stampede".

"Risk aversion" before Nvidia's earnings report: Don't forget, Nvidia will release its earnings report on August 28 (next Thursday)! This is the "heartbeat moment" for global AI investment. Many investors choose to sell part of it before the earnings report and wait for the results to come out before deciding whether to buy it back - this is called "early reduction" before "buying expectations and selling facts".

The real focus for investors: Nvidia's earnings report

Nvidia is about to release its financial report for the second quarter of fiscal 2025. This is not only a company performance report, but also likely to determine the direction of AI investment in the coming months. At present, one of the most concerned questions for investors is: can the revenue of the Chinese market be included in this financial report?

To put it simply: Due to U.S. export restrictions, Nvidia cannot confirm whether the revenue in the Chinese market can be recorded for the time being. Products such as H20 chips (AI chips designed for the Chinese market) and RTX6000D (B40), although there are orders and demand, require an export license from the US government to ship.

At present, the approval time of the license is uncertain, resulting in this part of the revenue not being "locked" in the financial report. The result? Nvidia is likely to temporarily exclude direct revenue from the Chinese market in its guidance for the next fiscal quarter. That's not a small amount — if you add this part, it would have generated $2 billion to $3 billion in incremental revenue for the company. It is equivalent to "evaporating" the quarterly revenue of a medium-sized technology company out of thin air.

Despite the policy disturbances, the market still gave high expectations: expected Q3 revenue: $45.92 billion (a year-on-year increase of more than 100%), expected earnings per share: $1.01. Behind this number is the reality that global cloud giants (Microsoft, Google, Amazon, Oracle) are frantically expanding AI data centers. As long as Blackwell chips are still shipping, Nvidia's fundamentals will remain strong.

But the question is: can the performance exceed expectations? Is the guidance for the next quarter optimistic? When will the Chinese market be "thawed"? These three questions are the key to determining whether the stock price will "hit a new high" or "pull back after the good news".