Growth stocks such as tech have endured a difficult year, but JPMorgan believes they are now looking more attractive than their valuations — and their defensive counterparts — as bond yields drop. The stock market has been plagued by broad risk-off sentiment this year, as investors rotate out of growth stocks amid a troubling macro backdrop. The war in Ukraine, soaring inflation and interest rate hikes by the U.S. Federal Reserve have left investors clamoring for safer bets in a volatile market. A series of earnings disappointments, particularly in growth sectors, have compounded market nervousness. But market sentiment appears to be shifting — albeit cautiously. Of the 10 major sectors on the S & P 500 , eight have notched gains over the past one month, according to FactSet data. Tech was the second-best performing sector during the period, gaining 5.7%. "We tactically prefer Growth over Value, but think both look more interesting than Defensives," JPMorgan's strategists, led by Mislav Matejka, said in a Jul. 25 research note. JPMorgan believes that the improving fortunes of growth and tech stocks would come down to movements in bond yields, which the bank said are likely to be "stalling." "The turn in interest rates suggests that the recent better performance of growth style over value can continue. We have been arguing to tactically favor growth over value, which can also be expressed through a better showing of the tech sector," said the analysts, who added that the broader pullback in commodity prices are also lending relief to inflationary pressure. Growth firms, which typically have cash flows further out into the future, benefit from lower yields on longer-dated U.S. government securities such as the 10-year U.S Treasury — used to calculate the present value of future cash flows of financial assets. Read more Wall Street pros think there’s more inflation pain ahead — and reveal how to trade it How sharp will the slowdown be? Wall Street says earnings season will provide these 3 clues Goldman says there’s a $10 trillion opportunity in the energy sector — and reveals 2 areas to watch The yield on the benchmark 10-year Treasury note dropped below 3% last week, after topping 3.48% in mid-June — an 11-year high. The 2-year Treasury rate , which is more sensitive to U.S. monetary policy changes, has also come off its June high and now sits at 2.868% — as investors bet that the Fed will slow the pace of rate hikes following a second-straight negative quarter for GDP in the U.S. JPMorgan names a host of growth stocks that have fallen significantly from their 12-month highs and which it thinks could now be ripe for investors to buy the dip. Stocks to buy the dip Against this backdrop, JPMorgan picked out a raft of buy-rated U.S. growth stocks that have fallen at least 40% from their 12-month highs. They include Zoom Video and data analytics firm Palantir in the tech sector. A host of communication services stocks also made JPMorgan's list. They include Meta , Snap , Walt Disney , and online dating service Match Group . Other stocks that made the bank's list include digital real estate marketplace Zillow and Uber . JPMorgan also screened for buy-rated European growth stocks that have declined by the same magnitude. The bank highlighted chip equipment manufacturer ASML and Dutch e-commerce firm Adyen as "buying opportunities."