J.P. Morgan Asset Management held a press conference today. On the right is Xu Changtai, chief market strategist of J.P. Morgan Asset Management Asia Pacific, and on the left is Lin Yahui, global market strategist of J.P. Morgan Investment Bank.
Although U.S. bond yields are rising, energy prices are rising, and the U.S. midterm elections are approaching, market noise is heating up. However, JP Morgan Asset Management believes that rising interest rates and energy prices do not mean that the stock market must correct. Historical data also shows that the U.S. midterm elections will not lead the stock market in the same direction. Investors should pay more attention to the proliferation of income and growth opportunities.
Xu Changtai, chief market strategist of J.P. Morgan Asset Management Asia Pacific, pointed out that historical experience shows that rising interest rates are not necessarily accompanied by a falling stock market. Although as of the end of September, the U.S. 10-year Treasury bond yield has risen from 4.2% at the end of 2025 to 5.3%, statistics 1 Data from 1997 to 2026 shows that the change in the 10-year U.S. bond yield and the return of the S&P 500 Index have shown positive correlations and negative correlations with different economic and interest rate cycles. There is no fixed relationship that "when interest rates rise, the stock market must fall."
Energy is also the focus of the market. Xu Changtai said that as of the end of September, WTI crude oil was about US$90.42 per barrel, and gasoline and diesel prices reached US$4.43 and US$6.41 per gallon respectively. The rise in energy prices may indeed push up inflationary pressure in the short term, so investors should observe its duration and whether it will further spread to other prices.
In terms of asset allocation, JP Morgan Global Market Strategist Lin Yahui said that the high interest rate environment has made "income" no longer have a single solution. Currently, the yield rates of global transportation, private credit, global non-investment grade bonds and Asian non-investment grade bonds have reached 9.2%, 9.0%, 8.1% and 7.7% respectively, and emerging market US dollar bonds have also reached 7.1%, showing that investors can find sources of income through different assets.
Regarding the AI industry, Lin Yahui said that in terms of capital and financial constitution, the market no longer embraces all AI concept stocks equally, but has shown significant differentiation. Emerging cloud companies are currently facing severe challenges. Their financing interest rates are as high as 10% or even higher. Coupled with excessive customer concentration and high debt ratios, the market's requirements for their return on investment have greatly increased, and their stock price performance has been relatively under pressure. On the contrary, server OEMs, data center hosting companies, and technology giants with sound balance sheets are favored by funds because their financial reports are better than expected and their financial risk resistance is strong. It is worth noting that a considerable proportion of this year's seemingly substantial increase in capital expenditure figures is due to the sharp increase in semiconductor and memory prices. The growth rate of actual construction numbers may gradually slow down in the future.
Looking forward to the future, she believes that AI investment themes will gradually become diversified, and the focus of market testing will shift from concepts and infrastructure to the company's financial report structure and the sustainability of its business model.
In terms of the extension of the overall industrial ecosystem, in addition to traditional infrastructure topics such as semiconductors, advanced packaging, and optical communications, information security and compliance software play a key role in the implementation of AI. Its irreplaceability will drive the improvement of industrial value; the development of power equipment supporting and emerging energy sources other than petrochemical fuels is also an indispensable part of maintaining the expansion of the AI ecosystem. In addition, non-tech industries such as the medical field have also begun to use AI to improve operational efficiency and have achieved outstanding results. Morgan Asset Management said that Asian semiconductors are still benefiting from the long-term trend of technology, but opportunities have gradually spread outwards, and new investment themes such as European banks, aerospace and defense have gradually emerged.
