The Zhitong Finance App learned that J.P. Morgan Chase's latest research shows that as macroeconomic uncertainty increases and technology stock fluctuations intensify, the rise in US stocks, which has continued for several months, is facing a test. More and more investors are turning their capital to stocks with relatively little price fluctuations to reduce the losses that may be caused by a fall in the market.
According to data from the J.P. Morgan Stock Strategy and Quantification Research Team, as of October 27, the S&P 500 index's low volatility stock index rose to 17.9%, which is the 18th percentile in history. However, in June of this year, this indicator was once close to its lowest level in history.
Simply put, this means that earlier this year, investors were generally more willing to chase high-rise and riskier stocks, and were less interested in stocks with relatively steady trends. However, in recent months, this situation has been changing, and more institutional investors have begun to re-allocate less volatile stocks.
It is worth noting that this indicator reflects the overall market position situation, not just the trading behavior of retail investors, so it also shows that institutional investors such as fund managers are adjusting their investment strategies.
Factors driving this change include financial statements from major tech companies and market concerns about the prospects for returns on artificial intelligence (AI) investments.
Tech giants such as Alphabet (GOOGL.US), Amazon (AMZN.US), Microsoft (MSFT.US), and Meta (META.US) continue to invest huge sums of money to build AI infrastructure, but investors are increasingly worried about whether these expenses will bring sufficient revenue and profits in the future.
Meanwhile, artificial intelligence company Anthropic's public submission of listing registration documents, uncertainty about Brazil's political situation, and the upcoming midterm elections in the US have further intensified market caution.
Against the backdrop of multiple risk factors, some investors have begun to reduce their allocation to stocks with high stock price fluctuations and instead buy stocks with relatively stable trends to prepare in advance for market shocks that may occur before the end of the year.
However, J.P. Morgan pointed out that although the popularity of low volatility stocks is rising, investors' allocation of such stocks is still at a historically low level, far from reaching the level during the impact of the 2020 pandemic or the tariff shock in 2025.
This shows that although risk aversion is showing signs of rising risk aversion in the US stock market, investors have yet to withdraw from risky assets on a large scale.
As capital gradually shifts to defensive investments, some stocks with relatively little fluctuation in stock prices and at the same time receive high quantitative ratings are also worth watching. According to Seeking Alpha's quantitative rating data, medical diagnostic company CareDx (CDNA.US) scored 4.99 points, close to the highest score of 5. Energy companies Marathon Petroleum (MPC.US) and Valero Energy (VLO.US) both scored 4.98 points, while Phillips 66 (PSX.US) and PBF Energy (PBF.US) both scored 4.97 points.
There are also a number of companies in the healthcare sector on the list, including Eton Pharmaceuticals (ETON.US), Halozyme Therapeutics (HALO.US), and the health insurance company Centene (CNC.US), with ratings of 4.96, 4.94, and 4.93, respectively.
Additionally, hotel real estate investment trust company DiamondRock Hospitality (DRH.US) scored 4.95 points, and energy company HF Sinclair (DINO.US) scored 4.94 points.
The common characteristic of these stocks is that the stock price in the past two years has been relatively less affected by the rise and fall of the general market, so they may be favored by investors who want to reduce the risk of portfolio fluctuations.
Seeking Alpha's quantitative ratings comprehensively examine factors such as stock valuation, growth potential, profitability, adjustments to analysts' profit expectations, and stock price performance. However, relatively small price fluctuations do not mean that there are no investment risks; these stocks may still experience large declines when the market falls.
Overall, J.P. Morgan's data shows that the risk appetite of US stock investors is changing. Although capital has yet to pour into defensive stocks on a large scale, the popularity of low volatility stocks has clearly rebounded from mid-year, indicating that more and more investors are preparing for potential market fluctuations.