JPMorgan said in a note Thursday that excesses in equity positioning and leverage have returned, which could act as a headwind for stocks in the fourth quarter. Strategist Nikolaos Panigirtzoglou wrote that elevated equity positioning and leverage have re-emerged, albeit to a lesser extent than last June and July, posing some challenge to equities into Q4. The bank had noted at the end of July that an earlier deleveraging phase had unwound most previous excesses, but two months on it finds several of those measures have rebounded. Leverage through U.S. equity futures is said to be back near its highs for the year, and JPMorgan's broader positioning indicator appears to have peaked in September after reaching levels seen in January and in August 2025. Panigirtzoglou added that short interest in SPY is bottoming out after hitting a record low in early September, short positions in semiconductor ETFs have normalized, and momentum traders have begun rebuilding long positions in the Nasdaq, Kospi, Taiwan and Nikkei, though not to previous extremes. JPMorgan flagged margin account leverage as the biggest vulnerability, saying it remained very elevated in August and barely changed through the summer deleveraging, even as the bank believes the tech and AI complex still has fundamental support, pointing to rising memory prices, higher capital spending forecasts for hyperscalers and holding AI computing prices.
JPMorgan Chase & CoJPMorgan's own strategist warns elevated equity positioning and leverage could weigh on stocks in Q4, but this is a market call, not a company-specific development.
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