JPMorgan joins the bullish camp on US stocks, raising next year's S&P 500 target to 7,500 points.

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

The team of strategists led by Dubravko Lakos-Bujas forecast in their latest report 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 on Tuesday, this implies roughly 11% upside ahead. The target is also higher than the 7,269 average forecast given by strategists tracked by Bloomberg as of last week.

Robust corporate earnings form the core pillar of JPMorgan’s bullish outlook. The bank’s strategists expect that corporate earnings will achieve strong growth of 13% to 15% at least over the next two years.

The report also points out that in a more optimistic scenario, if the Fed’s monetary policy is more dovish than the market expects, the S&P 500 Index could even break through 8,000 points by next year.

JPMorgan Shifts from Cautious to Rare Optimism

Regarding current market concerns about an AI bubble and overvaluation, JPMorgan offered its own explanation. The strategists believe that current high valuations are reasonable and supported by the fundamentals. They wrote in the report:

“Despite the existence of AI bubble and valuation concerns, we believe the current high valuations reasonably reflect the above-trend earnings growth expectations, the AI capex boom, increased shareholder returns, and a more accommodative fiscal policy.”

In previous forecasts, Lakos-Bujas had predicted the S&P 500 Index would close at around 6,000 points by the end of 2025, representing just a modest 2% gain from the end of 2024—a stark contrast to the current optimistic outlook.

JPMorgan’s optimism is not limited to the U.S. market. The team led by Mislav Matejka holds similar views on European equities. They predict that improving earnings next year will drive the Eurozone STOXX 50 Index up by 14% to reach 6,350 points.

Wall Street’s Bullish Sentiment Surges: S&P 500 May Climb to 7,800 Points

Recently, several Wall Street analysts have issued optimistic outlooks on the U.S. stock market for 2026. According to a previous article by Wallstreetcn, Morgan Stanley’s Wilson defines 2026 as “The Year of Risk Reboot,” saying the market focus will shift from macro uncertainty to micro fundamentals, creating a strong environment for risk assets to rally. He expects that an unusual “policy trifecta” of fiscal, monetary, and regulatory support will resonate with the AI investment cycle to drive strong corporate earnings growth, pushing the S&P 500 Index up to 7,800 points, based on an expected 17% growth in corporate earnings.

UBS Securities hedge fund equity derivatives sales manager Michael Romano wrote in a recent client report:

“There is no shortage of catalysts driving risk assets higher. The previously distant year-end target of 7,100 points is quickly becoming the market’s baseline expectation.”

John Kolovos, chief technical strategist at Macro Risk Advisors, said that the next resistance level for the S&P 500 Index is around 7,000 points. He stated:

“This will be an important milestone. If the index successfully breaks through, then 7,500-7,700 points will be the next target.”

Alexander Altmann, Barclays’ global equity tactical strategy head, estimates that considering the index’s 23% average annual absolute volatility over the past five years, the S&P 500 will reach 7,250 points by the end of December.

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