NEW YORK, Aug 18 (Reuters) - Several indicators that pointed to upside for U.S. stocks this year have shifted to a more neutral outlook, potentially leaving equities vulnerable to turbulence from a recent surge in bond yields and worries over China’s economy, investors said.

Some investors watch so-called contrarian indicators to gauge the market’s mood, with extreme pessimism thought to be a good sign to buy and vice versa.

Investors are looking ahead to the Federal Reserve’s annual symposium in Jackson Hole, Wyoming, at the end of next week for further insight into how long the central bank intends to leave rates around current levels.

Higher yields on Treasuries, which are seen as virtually risk free since they are backed by the U.S. government, can make stocks less appealing to investors, especially since equity valuations are high by historical standards.

“The market is particularly vulnerable right now” due to the surge in bond yields and concerns over contagion in the Chinese property sector, said Quincy Krosby, chief global strategist at LPL Financial.

Steve Chiavarone, senior portfolio manager at Federated Hermes, recently increased allocations to sectors such as energy and materials in anticipation of more economic growth.

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