Jay Barry, a senior market strategist at J.P. Morgan, has identified four key risks that investors should monitor during the second half of 2026 [1].

These factors are critical because they could reshape the global market outlook and shift investor sentiment as the year progresses. Understanding these pressures allows investors to gauge potential volatility and the likelihood of interest rate adjustments.

Among the primary concerns is the presence of persistent inflation and resilient economic growth. While growth is typically viewed as a positive indicator, Barry said that excessive resilience can complicate efforts to stabilize prices, potentially leading to renewed hawkishness from the Federal Reserve [1], [3].

Another significant risk involves the technical structure of modern trading. The rapid growth of leveraged ETFs has introduced a relatively new source of market risk that can mechanically amplify both rallies and selloffs, according to CNBC analysis [2].

In total, the strategist highlighted four [1] specific risks for the remainder of 2026 [1]. These include the aforementioned inflation and Fed policy concerns, alongside the volatility stemming from leveraged ETFs, and the broader implications of resilient global growth [1], [4].

Barry said these factors collectively create a complex environment for global financial markets. The interplay between economic data and the mechanical nature of leveraged instruments means that market swings could be more abrupt than in previous cycles [1], [2].

“The rapid growth of leveraged ETFs has introduced a relatively new source of market risk”

The shift in focus toward 'resilient growth' as a risk indicates a paradox where strong economic data may actually trigger market declines by forcing the Federal Reserve to maintain higher interest rates to combat inflation. Furthermore, the emphasis on leveraged ETFs suggests that market volatility is increasingly driven by the mechanical requirements of financial products rather than just fundamental economic shifts.