JPMorgan says rising yields are not an "insurmountable" obstacle for the stock market, and strong fundamentals support an optimistic outlook before year-end.

⑴ Despite the global bond market sell-off at the start of September causing volatility in risk assets, the JPMorgan strategy team maintains a constructive outlook on equities before year-end, believing that rising yields will not pose an insurmountable obstacle and that the overall environment for risk assets remains favorable.⑵ Eurozone PMI has rebounded for three consecutive months, and the US ISM Manufacturing Survey has reached a four-year high. The Economic Surprise Index remains strong, and earnings revisions per share across regions have turned positive overall. Dual macro and microeconomic support provides a buffer for equities.⑶ Regarding inflation expectations, wage growth is moderate and labor market signals are mixed. Strategists believe that the actual degree of central bank tightening may be lower than current market pricing, suggesting that the potential for rate increases is limited and there may be room to correct overly pessimistic expectations for rate hikes.⑷ In addition to previous institutional views, rising yields reflect increased momentum in economic activity rather than risks of uncontrolled acceleration. Looking forward, focus will be on policy signals during the upcoming global finance ministers' meeting and US tech earnings reports. If inflation data does not worsen beyond expectations, a valuation recovery trend in risk assets may gradually unfold.