J.P. Morgan predicts weakening stocks, potential retest of last year's lows.

J.P. Morgan's global markets strategy team warns that the recent rally in risk assets is irrational and driven by short squeeze and a decline in VIX. They predict a reversal in risk sentiment and the market re-testing last year's low over the coming months, with a drop of about 15% in the S&P 500 to around 3,500. The team believes that any decline in yields is not a sign that the Fed is about to bring a punch bowl for tech stocks, but rather a sign that recession probability has increased.