JPMorgan Chase joins the bullish camp for U.S. stocks, raising the S&P 500 target for next year to 7,500 points

JPMorgan Chase strategists have joined the growing bullish camp on Wall Street, predicting that the S&P 500 index will rise to 7,500 points by the end of 2026, marking a significant shift from the bank's cautious stance on U.S. stocks in recent years.

The team of strategists led by Dubravko Lakos-Bujas forecasts that the S&P 500 index will reach around 7,500 points by the end of 2026. Based on the index's closing price of 6,765.88 points on Tuesday, this implies an upside potential of about 11% in the future. This target is also higher than the average forecast of 7,269 points given by strategists tracked by Bloomberg as of last week.

Strong corporate earnings are the core pillar of JPMorgan Chase's bullish outlook. The bank's strategists expect corporate earnings to achieve robust growth of 13% to 15% over the next two years.

The report also notes that in a more optimistic scenario, if the Federal Reserve's monetary policy is more accommodative than the market expects, the S&P 500 index could even break the 8,000-point mark next year.

JPMorgan Chase Shifts from Caution to Rare Optimism

In response to current market concerns about an artificial intelligence bubble and overvaluation, JPMorgan Chase has provided its own explanation. The strategists believe that the current high valuations are justified and supported by fundamentals. They wrote in the report:

“Despite concerns about an AI bubble and valuation worries, we believe the current high valuations reasonably reflect expectations for above-trend earnings growth, a surge in AI capital expenditures, increased shareholder returns, and more accommodative fiscal policies.”

According to previous forecasts, Lakos-Bujas had previously expected the S&P 500 index to close around 6,000 points by the end of 2025, indicating only a slight 2% increase compared to the end of 2024, contrasting sharply with the current optimistic outlook.

JPMorgan Chase's optimism is not limited to the U.S. market. The team led by Mislav Matejka and others holds the same view on European stocks. They expect that as earnings conditions improve next year, the Eurozone's STOXX 50 index will rise by 14% to reach 6,350 points.

Wall Street's Bullish Sentiment Soars: S&P 500 Could Rise to 7,800 Points

Recently, several Wall Street analysts have made optimistic forecasts for the U.S. stock market in 2026. According to a previous article from Wall Street Watch, Morgan Stanley's Wilson defined 2026 as “The Year of Risk Reboot,” believing that the market focus will shift from macro uncertainty to micro fundamentals, creating a strong upward environment for risk assets. He predicts that a rare fiscal, monetary, and regulatory “policy trifecta” will resonate with the AI investment cycle, driving strong corporate earnings growth, pushing the S&P 500 index to 7,800 points, based on an expected 17% growth in corporate earnings Michael Romano, Head of Hedge Fund Equity Derivatives Sales at UBS Securities, wrote in a recent report to clients:

"There is no shortage of catalysts driving risk assets higher. The previously distant year-end target of 7100 points is rapidly becoming the market's basic expectation."

John Kolovos, Chief Technical Strategist at Macro Risk Advisors, pointed out that the next resistance level for the S&P 500 index is around 7000 points. He stated:

"This will be an important milestone, and if the index successfully breaks through, then 7500-7700 points will become the next target."

Alexander Altmann, Head of Global Equity Tactical Strategy at Barclays, expects that considering the index's average absolute volatility of 23% over the past five years, the S&P 500 index will reach 7250 points by the end of December