Analysts at JPMorgan reiterated a cautious stance as traders are too optimistic at the moment.

The S&P 500 rose Tuesday, setting a new high, and the benchmark index is up 7.4 percent over the past year, despite an rate hike, a major banking crisis and an oil shock.

All of these factors “are not good for risk,” JPMorgan analysts wrote in a note to clients.

“It doesn’t make sense to a rational investor, and most of the inflows over the past 2 weeks have been driven by systematic investors, short-squeezes and a decline in the VIX Fear Index. Any decline in yields is more of a sign that the likelihood of a recession has increased,” they wrote.

JPMorgan believes that the entry of the U.S. economy into recession in the next 12 months “will be basic.” Because of that, analysts said, risk sentiment will turn negative, which will eventually cause it to hit last year’s lows “in the coming months.”

In such an environment, investors should cut back on stocks and prioritize defensive and cyclical assets.

JP Morgan is one of the largest banks in the world, with a long history and rich experience in financial markets. The bank was founded in 1871, and since then the bank has gone through many economic cycles, market crises and changes in legislation. JP Morgan has a broad international reach and works with clients in many countries around the world. Because of this, the bank has access to a variety of information from different markets. This experience and market knowledge, accumulated over many years, enable the creation of authoritative analytical reports and forecasts.

Earlier, we reported that Microsoft was “fined” in the U.S. for its cooperation with Russia and other countries.