• JPMorgan forecasts the S&P 500 could reach 7,500 by year-end 2026, with potential to surpass 8,000 under more aggressive Fed easing
  • The bank projects 13-15% earnings growth for U.S. companies over the next two years, driven by AI-driven capital expenditures and supportive fiscal policy
  • While bullish on equities, JPMorgan warns that rapid AI disruption could amplify economic imbalances and create market volatility

JPMorgan Chase & Co., the world's largest bank by market capitalization, has laid out an ambitious trajectory for U.S. equities, predicting the S&P 500 could climb to 7,500 by the end of 2026—and potentially breach the 8,000 threshold if the Federal Reserve cuts rates more aggressively than expected.

The forecast, detailed in the bank's 2026 Global Equity Outlook, comes as the benchmark index has rallied 31% from its April 2025 lows, with current valuations hovering near 23 times 12-month forward earnings. According to people familiar with the matter, the bank's analysis suggests double-digit global equity gains are achievable over the next two years, with the U.S. remaining the primary growth engine.

"We see the U.S. economy maintaining its global resilience," the report stated, pointing to accelerating AI-related capital expenditures and recent fiscal policy tailwinds as key drivers. The bank specifically cited the "One Big Beautiful Bill Act," a recent tax law that allows instant expensing of equipment and R&D costs, as stimulating a wave of corporate investment.

JPMorgan's base case assumes continued Federal Reserve easing, but the more optimistic 8,000+ scenario would require additional monetary policy support. The bank's analysts noted that persistent but moderating inflation and subdued labor market pressures provide central banks with leeway for potential further rate cuts.

While the outlook remains broadly positive, JPMorgan included several caveats. The bank cautioned that the S&P 500 could experience near-term volatility, potentially dipping toward 6,000-6,200 before resuming its upward trajectory. Rapid AI adoption, while driving growth, could also amplify existing economic imbalances and contribute to market turbulence, according to the report.

Other Wall Street firms have echoed similar themes, with Piper Sandler also emphasizing both AI and expansionary fiscal policy as key market drivers. However, JPMorgan's projection stands among the more bullish on the Street, reflecting confidence in the sustainability of the current investment cycle.

Attempts to reach JPMorgan spokespeople for additional comment were unsuccessful Thursday afternoon. The bank's outlook assumes macroeconomic stability and continued policy support, with risks including any abrupt change in Fed policy or fiscal backing.

Correction: An earlier version of this article misstated the timing of the S&P 500's recent lows; they occurred in April 2025, not 2024.