A major financial institution is starting to lose enthusiasm for U.S. stocks.

Invesco’s Kristina Hooper is worried the latest coronavirus spike will push states to close their economies again.

“Up until now the U.S. has been rewarded because of expectations that we wouldn’t see any kind of significant lockdowns even if infection rates grew,” the firm’s chief global strategist told CNBC’s “Trading Nation” on Wednesday. “But the reality is that when the hospitals fill up and there are no more beds, then governors are forced to reimpose lockdown measures.”

She’s urging clients to consider diversifying abroad — particularly to Europe and Asia emerging markets, including China. Hooper contends those regions have a better handle on the pandemic.

“The United States is unique in that it has not been able to control the virus,” Hooper noted.

According to Hooper, that’s the main issue setting those areas apart from the U.S. right now.

“Valuations are more attractive. That’s true for European equities. That’s true for China and Asian EM [emerging markets],” she added. “I would focus more on cyclicals because it looks like that economic recovery is gaining steam based on the data that we’re seeing.”

Yet, U.S. stocks are still pushing higher. Since the March 23 low, the S&P 500 has rallied 45% and the Dow 43%.

“We have a very powerful force in the Fed and the kind of extraordinary monetary policy that it has provided,” Hooper said. “That really has given an upward bias to stocks, and that continues to be present.”

Despite the benefits of massive government stimulus, Hooper sees signs of cracks in the rally.

“I do believe there is some concern and some apprehension,” she said. “We’ve seen that manifest itself in the rising gold prices. We’ve also seen it manifest itself in the leadership of secular growth like technology because that’s typically not as impacted.”

The tech-heavy Nasdaq has rocketed 58% since the March low and has been hitting new record highs. 

“It’s not cyclical,” Hooper said. “So, it can weather the storm of rising infections.”

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