Investors bought the dip in US equities to the tune of $34 billion, but maybe this is a falling knife?

That’s a question. And I don’t know the answer. There’s a lot of speculation out there that we may be witnessing a dot-com-style unwind in US tech where, despite undeniably strong balance sheets and still-sturdy growth (with a few exceptions), some worry that hundreds of billions in AI-related capex might’ve been misspent.

In addition, the specter of a softer US labor market from the ripple effects of DOGE’s increasingly controversial cost-cutting push has some observers spooked, and I wonder if there’s a threshold for norm-breaking beyond which risk sentiment will become sensitive to evidence that the rule of law’s at risk in America. (Laugh as you will, but the brazenness in that regard on display since Inauguration Day has no modern precedent.)

Of course, the primary concern for most market participants currently remains US trade policy, and in the latest edition of the bank’s resurrected (i.e., post-Marko) cross-asset strategy note, analysts including Fabio Bassi and Dubravko Lakos-Bujas suggested it may be too early to reengage Overweight in US equities.

“Two weeks ago we turned tactically cautious on risk assets on increasing concerns from trade uncertainty into business sentiment, itself enough to lower sharply our expectation for US growth,” the bank wrote, in the course of reiterating that the S&P will likely be rangebound between 5200 and 6000 for the foreseeable future.

As discussed in these pages pretty much every day, “clarity on trade tensions is not imminent” as Bassi and co. put it, noting that already, US tariffs have tripled, and that’s before “Liberation Day” on April 2.

“Despite the exemptions and delays in the tariffs announced so far, we estimate that the average tariff rate has already increased by 5% in the US (from 2% to around 7%), with a bias for a further increase to around 11% if broad reciprocal tariffs and 25% sectoral tariffs are effective,” JPMorgan said.

And, so, the bank’s “cautious on risk assets with room for US underperformance as the uncertainty from US trade policies and US recession risks linger and as investors continue to rotate to the more structurally positive themes of China AI and Europe’s fiscal shift.”

What’s it gonna take to make the US exceptionalism theme great again? Well, “less confrontational trade policies,” JPMorgan gently suggested, quickly adding that’s “not our baseline scenario at this point.”

As far as the so-called “Trump put,” it’s struck lower than most market participants imagined it ever could be, something Bassi and Lakos-Bujas emphasized. “Given the expected focus on S&P 500 performance as a broad metric for the new administration we believed that the strike of the Trump put would be higher than the strike of the Fed put [but] the current narrative of the Trump administration challenges this assumption,” the bank said. “The acceptance of an ‘adjustment phase’ for the US economy indicates a lower sensitivity to the recent decline and volatility in equity markets, especially if that cost is perceived as temporary.”

The S&P, they went on, could retreat near the low-end of their range (i.e., toward 5200) before the administration’s sensitivity to stocks starts to increase meaningfully.