JPMorgan strategist calls software sell-off a healthy market rotation

Tech shares sold off after Anthropic released new plugins for its Cowork agent, and volatility spread as investors exited positions in many software stocks. Stephen Parker, co-head of global investment strategy at JPMorgan Private Bank, told CNBC the panic is overblown and that the move looks like a healthy rotation.

"We're seeing a rotation," he said. "It's about a broadening of the recovery story. Cyclicals are picking up the slack, and it's not just the AI infrastructure plays and the hyperscalers that are driving markets higher." Parker said AI beneficiaries will continue to cause disruption, particularly in software, but his team still likes the tech sector while also seeing opportunities in US cyclicals, the industrial story and the power story.

"There's also opportunities more broadly, whether you're thinking about cyclical opportunities in the US. We really like the industrial story and the power story," he stated.

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