JPMorgan strategists reiterated their cautious stance on U.S. equities as they believe the market resilience is unlikely to last.

The bank’s strategists argue that economic data is likely to worsen in the second half of the year while corporate earnings will come under pressure. Hence, they say the market “needs to resolve a basic disconnect: how will the Fed pivot if there is no pain?”

“We believe that the consensus view that the worst of pressures is behind us will be proven wrong, as the impact of monetary tightening has historically worked with a lag, and certain growth supports are waning, such as excess savings and strong profit margins,” strategists said in a client note.

Hence, they add that the tech sector “could struggle to advance further in 2H” unless the leadership broadens.

“If markets weaken in 2H though, as we expect, the US was typically a less risky market than others in downturns. We advised last October to turn more positive on Tech, and are OW Growth vs Value this year, but the sector run has been exceptional, and Tech could face some air pockets.”

One of the core pillars of JPMorgan’s bearish stance on U.S. equities is the belief that corporate pricing power is likely to weaken from here.