J.P. Morgan forecasts the S&P 500 to reach 7,500 by the end of next year, buoyed by a robust US economy and an artificial intelligence-driven “supercycle.” Dubravko Lakos-Bujas, J.P. Morgan’s head of global markets strategy, released the outlook late Tuesday. The index closed Tuesday at 6,765.89, meaning the forecast represents a potential gain of 10.9%. The prediction aligns closely with the median year-end 2026 target of 7,490 from a recent Reuters poll of equity strategists. J.P. Morgan is a global financial services firm, providing investment banking, asset management, and other financial services. They serve corporations, governments, and institutions around the world.
The J.P. Morgan outlook anticipates two additional interest rate cuts from the Federal Reserve, followed by a prolonged pause. However, Lakos-Bujas and his team noted that a more aggressive easing of monetary policy by the Fed could propel the S&P 500 beyond 8,000 in 2026. “The U.S. is set to remain the world’s growth engine,” the report stated, highlighting the nation’s continued economic strength as a key driver for market performance.
Lakos-Bujas projects S&P 500 earnings growth of 13-15% for at least the next two years. Data from LSEG indicates that analysts expect 2026 S&P 500 earnings growth of 14.3% year-over-year. This optimistic earnings outlook supports the firm’s overall positive assessment of the market’s trajectory.
“Despite AI bubble and valuation concerns, we see current elevated multiples correctly anticipating above-trend earnings growth, an AI capex boom, rising shareholder payouts, and easier fiscal policy,” the report added, suggesting that current market valuations are justified by the expected future growth and policy environment.
