Investors are doubling down on their bets on stocks, shrugging off worries about a U.S. economic slowdown that led to a selloff earlier this month. Global stock markets fell sharply in early August as rising unemployment stoked concerns that U.S. economic growth could slow more than expected. This has led many investment banks to raise their forecasts for a recession, with JPMorgan raising the likelihood of a year-end recession to 35%. However, a series of positive data points have since pushed the market firmly back into the green, with investors listing three key reasons why they are bullish on the stock market's future. Cash Balance Clough Capital fund manager and CEO Vince Lorusso told CNBC's “Squawk Box Europe” on Monday: “The fundamental drivers of stock performance are in place.” “We are very constructive on the stock. We're very excited about some of the investment opportunities we're seeing. Investors should invest in technology and artificial intelligence stocks because of the fact that these companies have “a lot of cash on their balance sheets.” According to FactSet data, the so-called “seven major technology stocks” collectively increased their cash reserves by 8.5% last quarter, reaching $456 billion compared with a year ago. This financial strength provides a buffer against economic headwinds and offers the potential for growth and shareholder returns. For Lourusso, the financial health of companies is a key factor supporting stock valuations despite some dismal economic data. “We do like technology and artificial intelligence. Obviously, it's because of their revenue-increasing potential, but they (also) already generate significant free cash flow,” LouRusso explained. Resilient economy Beyond this optimism, Capital Economics chief economist Neil Schilling said the broader economic data “does not suggest the U.S. labor market is breaking down.” Schilling pointed to two straight weeks of declines in initial jobless claims since the stock market selloff as a sign of the economy's resilience. Schilling said in a note to clients on August 19, “Even the permanent bears will be hard-pressed to find much evidence in the deluge of data released over the past week to justify recent recession fears.” Over the weekend, Goldman Sachs It lowered its forecast for a recession. Capital Economics expects the S&P 500 to reach 6,000 points by the end of the year and 7,000 points next year, which are 8% and 26% higher than current levels respectively. Strong retail sales data in recent days and strong profits from consumer staples giants such as Walmart also show that American consumers are resilient. The supermarket giant reported same-store sales growth after six consecutive quarters of declining growth, suggesting the economic slowdown may be bottoming out. Historically, the Fed has cut interest rates only after the economy has slowed significantly. But investors say things are different this time. If the Fed cuts interest rates by 25 basis points in September, as expected, it will be because of falling inflation, not a lack of growth. Patrick said: “The reason why (Federal Reserve Chairman) Powell wants to cut interest rates is not because of the severe economic situation, but because as inflation falls, the current federal funds rate becomes more stringent, and that is the reason for the reduction. “Armstrong, chief investment officer of Plurimi Wealth. “It's a valid reason to cut spending, so I think that creates a supportive backdrop.” However, investment bank UBS said that despite the positive outlook, stock market investors may face a bumpy ride higher. The bank believes that rate cuts may ease the pressure building up in the economy, but it may take several months to be felt. “While we remain bullish overall, we do not believe the market will rise in a straight line as the economy is slowing and there are likely to be conflicting economic data points in the coming months, which will continue this recession debate,” UBS Private Wealth said managing director Greg Marcus. “Our view is that the economy is slowing, but not fast enough to enter recession territory.” — CNBC's Fred Imbert, Jeff Cox and Melissa Repko contributed reporting.