JPM | US MACRO THEMATICS - Alphabet Soup: Rate Vol, Momentum, and Credit Concern

Research evidence excerpt

JPM | US MACRO THEMATICS - Alphabet Soup: Rate Vol, Momentum, and Credit Concern

Specialist Sales

US Specialist Sales J P M O R G A N

28 July 2026

JPM | US MACRO THEMATICS - Alphabet Soup: Rate Vol,

Momentum, and Credit Concern

Marissa Gitler

+1 212 622 2934

marissa.gitler@jpmorgan.com

US Thematics focuses on key macro views, market debates, and favored investment themes.

Bottom Line: The current market is defined by more than just momentum right now. As Semi’s positioning continues to

unwind the Fed is introducing rate vol and hyperscaler credit stress is quietly undermining the AI equity narrative.

1) FOMC Introduces Rate Vol regardless of the outcome: With a >30% probability of a FOMC hike priced, there will be

a significant move in US fixed income regardless of the meeting outcome. Even if consensus prevails and rates are held

steady, the front end is currently 8bp offsides.

2) Momentum is a Factor not a Macro Story: The momentum factor is signaling shifting fundamentals. Semis still carry

heavy long-term momentum exposure (14.56% net weight in JPPQMO) but the shorter-term basket is already rotating, and

with VIXEQ-VIX compressing alongside momentum weakness, the selloff looks fundamentally driven rather than purely

technical.

3) Hyperscaler Credit is signaling stress despite tightness in broader credit markets: Datacenter spreads have widened

to 151bp vs. broader IG at 91bp (a 61% spread pickup) while hyperscaler equity multiples continue to expand. With these

names representing 8.1% of DTS vs. 4.3% of par weight, their risk is outsized. Falling inference costs compound the capex

ROI problem, and the divergence between CDS widening and equity multiple expansion is an unstable tension that

ultimately resolves in one market being proven wrong.