J.P. Morgan Private Bank Positive on Four US Equity Sectors Amid Capex Boom

J.P. Morgan Private Bank is bullish on four US stock sectors amid the ongoing capital expenditure trend.

Abigail Yoder, an equity strategist at the financial giant, says in a new analysis that the bank is positive on financials, industrials, information technology, and utilities and energy infrastructure.

Yoder notes financials are in a good place to absorb market volatility.

“Large, high-quality banks remain well positioned in the current rate environment, which we describe as ‘higher-for-longer but stable.’ Net interest margins continue to benefit from elevated rates and a steepening yield curve. Resilient credit fundamentals and strong capital positions support earnings durability and downside resilience.”

In terms of industrials, Yoder says defense spending, infrastructure buildout, AI-related capex and reshoring initiatives are all driving structural demand.

“Money is moving into a range of capital-intensive industries, from power equipment and construction to various types of advanced manufacturing. Together, they illustrate the breadth and depth of the industrial cycle.”

The strategist notes that information technology has been the core driver of S&P 500 earnings.

“Recent valuation compression reflects macro volatility and not a deterioration in fundamentals. As we’ve discussed, we see a bright outlook for tech earnings, underscoring the sector’s role as a central pillar of growth and innovation in the U.S. economy.”

Finally, Yoder says utilities and energy infrastructure are increasingly exposed to structural demand.

“Electrification, AI-driven power consumption and grid modernization are shining a spotlight on the economy’s need for long-term energy investment and the sector’s strong earnings prospects.

Forecasters project that electricity demand will exceed current generation capacity over the coming years… A sustained supply-demand imbalance will support companies’ pricing power. We think it will also underpin a multi-year investment cycle across electricity generation, transmission and grid infrastructure.”

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