JPM US Market Intelligence Afternoon Briefing Aug 18

IDEAS & INSIGHTS – IN BRIEF • MKT UPDATES – Thoughts on Momentum Selloff, US/Iran, Retail Earnings (Views on HD from Horvers; buyside bar from JPM Spec Sales team) • DESK COMMENTARY – Desk commentary on Tech and Healthcare flow today. • US MKT INTEL VIEW – We are Tactically Bullish and we update the Monetization Menu.

AFTERNOON UPDATES (NEWS LINKS) • SPX -0.7%, NDX -1.7%, RTY -1.3%. WTI +71bps at $85.10, NatGas +353bps to $2.79, UK NatGas +382bps to £1.5837, Gold -169bps to $4,341, Silver -350bps to $63.49, 10Y @ 4.702%, and VIX @ 15.84. • US: Stocks closed lower; Tech lagged. The selloff was concentrated in momentum/AI exposure (memory, semis and big tech), a reversal to yesterday’s price actions. Market headlines have been pointing to the surge in bond yields as the driver, but we see seasonality lower volume and lack of catalysts being bigger reasons for today’s momentum selloff. On macro data, July Housing Starts missed while Building Permits surprised higher, and pending home sales fell to the weakest since January. Oil stayed elevated (WTI closed at $85.12) as US/Iran uncertainty lingered. • EU/UK: Major markets closed mostly lower; Italy lagged. SXXP fell 0.7% today, the fifth consecutive day of declines, longest since November 2026, amid low trading volume. Thematically, Semis, Momentum Long and Gold Equities were among the worst performing baskets. UK Unemployment surprised to the upside: 4.9% vs. 4.8% survey vs. 4.9% prior. UKX +0.1%, SX5E -1.0%, SXXP -0.7%, DAX -0.8%.

CATALYSTS TOMORROW (FULL WEEK CALENDAR) • US MACRO DATA TOMORROW: Mortgage Applications at 7am ET. FOMC Meeting Minutes at 2pm ET. • US EARNINGS TOMORROW: ADI, EL, IOND, LOW, TJX, TGT, WOLF

• GLOBAL MACRO DATA TOMORROW: (UK) CPI/PPI and Retail Price Index at 2:00am ET. (Eurozone) CPI (revision) at 5:00am ET. (Japan) Trade Balance at 7:50pm ET.

JPM MARKET INTEL EQUITY & MACRO NARRATIVE

TODAY • MOMENTUM SELLOFF – Markets/headlines are trying to pin today’s pullback on (i) higher long- end yields, (ii) AI-related debt issuance worries and (iii) Anthropic ARR number, but to us this read more like a low-volume, low-catalyst, post-earnings-induced pullback than the start of anything more structural. Our trading desk shared that volume was light (comments from JPM Senior trader Brian Heavey “Flows are NOT busy. 3/10 at best. Some semis de-risking in pockets, but not a ton.” o To the question, “what changed today?” Brian summarized that “Main driver of the momentum reversal today folks are pointing to is the "only $65B" ARR number Anthropic told investors on an update call (as reported by Bloomberg). Various data sources had implied higher ($75-80B). Again, we have little clarity as to how the number is calc'd but it's a slow summer week. I digress. FN missed its Datacom segment number but that's more idiosyncratic for FN in our view.” o Meanwhile, SOXX are still ~18% off the July low, and given yesterday’s rally, today’s price actions feel more like a range bounded reversal than a de-risking event. o WHAT’S NEXT? – Without major catalysts, I think we will stay in a range-bounded, choppy environment until NVDA (Aug 26) and Jackson Hole (Aug 27-29). Positioning Intel tells us last week that Aggregate Positioning remains neutral ~40%-ile, -0.2z. Given the low-volume environment, the market can be one catalyst away from AI positive to AI concerns. With this setup, it may be worth considering dip-buying opportunities, especially with underlying fundamental remains intact. • US/IRAN – The narrative around the Middle East remains the base case of no clean off-ramp in the near-term, but overall news flow today was quiet. A few headlines: (i) A CNBC report highlighted continued ship attacks in the Strait of Hormuz; (ii) said no talks/negotiations with Iran are planned (CNBC); (iii) Iran reiterated the stance that Hormuz will remain shut until interim-deal conditions are met (RTRS).

• JAY BARRY ON RATES MOVE TODAY – Long-end yields continued to move higher overnight, as the JGB curve bearishly steepened by 7bp and added further steepening pressure to the global rates complex. As we have argued previously, we think global factors have in part