JPMorgan Chase says the S&P 500 is positioned to extend its multiyear bull run in 2026.
The index is up 16% this year after rising at least 23% in each of the prior two years, edging to 6,838 in early trading in New York.
JPMorgan’s base-case outlook calls for the S&P 500 to reach 7,400 next year, which would mark a gain of about 9% from current levels.
The firm’s Private Banking & Wealth Management division says a mix of economic re-acceleration, strong earnings and ongoing advances in artificial intelligence could also lift the index as high as 8,200, reports Bloomberg.
The forecast arrives as investors weigh concerns about the AI narrative and signs of slowing economic momentum.
JPMorgan is advising clients to use “diversifiers and shock absorbers” such as infrastructure, real assets and gold to hedge against inflation.
Head of investment strategy Jacob Manoukian says private markets will remain a source of return generation and argues that the gap between public and private assets is narrowing as AI investment themes expand.
Global head of market strategy Dubravko Lakos-Bujas expects the S&P 500 to rise about 10% to 7,500 by the end of 2026 and says gains could reach 8,000 if inflation cools enough to allow the Federal Reserve to cut rates more than twice.
JPMorgan also identifies a bear-case scenario in which the S&P 500 drops to 4,600 if the AI theme weakens and economic conditions deteriorate.
Manoukian says AI carries “tremendous risk” if model performance plateaus or spending fails to generate returns, but Corporate America has driven market performance this year by consistently exceeding earnings expectations.
He says the firm expects the same earnings-driven profile to continue into next year.
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