JPMorgan Chase & Co.'s (JPM  ) asset-management arm advised investors to stay invested in stocks and other higher-risk assets in the second half of 2026, amid an AI boom and resilient consumption, despite persistent inflationary pressure. David Kelly, chief global strategist at JPMAM, told Bloomberg on Wednesday, "The good news in terms of baseline forecast is we think the economy will strengthen in the middle of the year." He attributed that strength partly to income tax refunds and stimulus checks from Washington, besides AI spending.

However, Kelly predicted that the Democrats could take control of the House after the mid-term elections, raising questions on the potential stimulus checks in 2027.

"It's an OK economy for Americans; it's a great economy for the stock market," he stated, while adding, "We're not forecasting recession...The wealth effect and the AI boom keep us going."

Kelly stated that the U.S. is in the fourth year of a very strong bull market, but warned of high "concentration risk." The strategist stated that the next bear market could be centered around whichever sector has the maximum hype.

"And that's everything to do with AI," he said.

Meanwhile, JPMorgan Asset Management, in its 2026 midyear outlook, released on Monday, suggested investors to look for defensive alternatives such as real estate, transportation and infrastructure to diversify their investment.

Stocks Hit Highs, Debate Widens

A sharp sell-off in technology and chip stocks last week, ahead of the high-stakes Space Exploration Technologies Corp. (SPCX  ) IPO, sparked a fierce debate on Wall Street, but Fundstrat's Tom Lee viewed the market dip as a "healthy" consolidation."

Lee said the broader uptrend is still intact and downplayed concerns that SpaceX's mega-listing signals a market top, arguing that widespread belief in a peak often suggests the market is not actually at one.

Meanwhile, Steve Neamtz, CEO of Yorkville America Equities, managing the Trump Media & Technology Group's (DJT  ) Truth Social Funds, told Benzinga, last week that despite the benchmark index reaching record highs, over 300 of its stocks are considerably trading below their all-time highs, indicating untapped opportunities and urging investors to look beyond tech stocks.

Echoing JP Morgan's David Kelly, Neamtz highlighted defense sector, real estate bets in the Sun belt region and American energy producers as the storehouses of a real American growth story.

Price Action: On a year-to-date basis, State Street SPDR S&P 500 ETF Trust (SPY  ) and

Invesco QQQ Trust, Series 1 (VOO  ) surged 9.83% and 19.04%, as per data from Benzinga Pro.