JP Morgan expects retail investors to drive the US stock market, with an estimated $500 billion in funds expected to flow in the second half of the year

JP Morgan's latest forecast indicates that retail investors will continue to be the main driving force behind the rise of U.S. stocks, with an expected influx of up to $500 billion into the U.S. stock market in the second half of the year, driving the S&P 500 index up another 5% to 10% by the end of the year.

The analysis team led by JP Morgan's chief strategist Nikolaos Panigirtzoglou stated that retail investors took advantage of low prices during March to April and chose to take profits during May to June, resulting in a temporary slowdown in fund flows. However, JP Morgan believes that investors are merely adjusting their pace and expects them to restart buying in July.

At the same time, the bank anticipates that retail investors will collectively invest $630 billion in U.S. stock funds throughout the year, with approximately $360 billion still yet to enter the market, which will gradually flow in during the second half of the year. Additionally, if the U.S. dollar remains stable, it is expected that a significant amount of foreign capital will return, and together with retail investor funds, JP Morgan estimates that U.S. stocks could rise another 5% to 10% in the second half of the year, continuing the strong upward trend seen since the beginning of the year