Fall in Focus: 5 Things Investors Should Watch
1. The Fed’s cutting cycle
The Fed’s message has been consistent: If inflation expectations stay anchored, it won’t overreact to tariff-driven bumps and will keep a close eye on the labor market, where both demand and supply have cooled. At Jackson Hole, Powell essentially doubled down on that – “the balance of risks are shifting,” with downside risks to employment rising. So, the Fed won’t let one-off price moves drive policy.
2. Corporate profits
As of June 30, investors expected Q2 S&P 500 earnings growth of 4.9%. With 95% of companies having reported, that number is running near 12%.
A few tailwinds are likely to help into year-end – tariff policy is clearer than earlier in the year, trimming planning risk. Sectors such as tech and utilities should benefit from ongoing artificial intelligence investments and data-center capex, plus support from that One Big Beautiful Bill – while a Fed cut (and a gentler path thereafter) would be a clear catalyst for rate-sensitive growth leaders.
3. AI capex super-cycle – still on; power is the bottleneck
The capex super-cycle is intact, but power availability and interconnect timelines will pace it. We see opportunity in the picks-and-shovels: Utilities with load growth, grid and power suppliers and AI enablers.
4. Europe: Stronger euro, new capex, defense momentum
Growth is modest and inflation has cooled, but the euro’s recent strength is a headwind for big exporters. As a rule of thumb, a 10% appreciation of the euro reduces EPS by approximately 4% for Europe’s 50 largest companies. That FX bite shows up first in guidance from globally exposed sectors – hence we like the domestic story (as Europe addresses some of its longstanding issues, less FX drag).
5. China: Structural strains, tech upside taking shape
We’re a bit more optimistic on China tech. Valuations remain attractive versus global peers, the regulatory backdrop has stabilized and the domestic AI stack keeps advancing – innovation can continue even with constraints. Tariff policies are more predictable, reducing planning risks for hardware and supply-chain companies.
Rick Barragan is the Managing Director,
Los Angeles Market Manager, for
J.P. Morgan Private Bank.
[email protected] | (310) 860-3658
privatebank.jpmorgan.com/los-angeles
Source: “Fall in focus: 5 things investors should watch,” Federico Cuevas, Global Investment Strategy, Aug. 28, 2025
