Analysts at JPMorgan Chase (JPM) remain bullish on U.S. stocks.
The world’s largest commercial lender forecasts a base case for the benchmark S&P 500 index at the end of 2026 of 7,500.
However, JPMorgan says that the S&P 500 could surpass 8,000 next year if the U.S. Federal Reserve continues lowering interest rates.
The forecast is 10% to 18% higher than where the benchmark U.S. stock index is at currently.
In a note to clients, JPMorgan says that it anticipates two more early 2026 interest rate cuts from the U.S. central bank followed by a pause.
The analysts add that they expect American exceptionalism to continue and for the U.S. to remain “the world’s growth engine” throughout 2026 driven by a resilient economy and an artificial intelligence (A.I.) super cycle.
However, JPMorgan concedes that rising valuations of A.I. stocks are an area of risk for the U.S. market heading into the new year.
The analysts say that they expect A.I. capital expenditures to grow by 34% in 2026 and that the A.I. universe of stocks should broaden out.
Beyond the A.I. theme, resource stocks such as rare earths and uranium should see continued momentum, given expectations for ongoing U.S.-China competition, says JPMorgan.
The S&P 500 index is currently at 6,765.88, having risen 15% this year. JPMorgan’s stock has gained 26% in 2025 to trade at $303 U.S. per share.
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