The dip may be getting less dramatic
JPMorgan’s equity strategists think the AI trade is moving from “panic” into “cleanup mode.” Translation: the selling still hurts, but it may be running out of fresh excuses to keep tumbling.
The bank pointed to a rough stretch for AI-linked names, with Korea’s market down 25% from last month’s high and the SOX semiconductor index off 20%. That’s not exactly a gentle wobble — it’s more like the market hit a patch of black ice.
Why investors should care
If the unwind is maturing, that matters for anyone who’s been riding the AI roller coaster. A mature sell-off usually means less forced de-risking, fewer “sell first, ask questions later” moves, and more of a chance for earnings to actually matter again.
JPMorgan’s bigger point is that upcoming earnings could act like a floor. If companies keep showing real demand, real margins, and real revenue instead of just AI buzzword confetti, investors may start treating this as a reset rather than a collapse.
Big picture
The AI trade doesn’t need to rocket higher tomorrow to stop being painful — it just needs to stop behaving like everyone forgot gravity exists. For now, JPMorgan thinks the market might be getting closer to that stage.