Overview
- JPMorgan’s base case assumes two additional Federal Reserve cuts before a pause, supporting its 7,500 year-end 2026 target for the S&P 500.
- The firm says a quicker easing path could lift the index above 8,000, contingent on inflation trends and policy decisions.
- Analysts project S&P 500 earnings growth of 13% to 15% over the next two years, anchored by an AI-related capex surge and shareholder payouts.
- Alphabet, Microsoft, Amazon and Meta together plan to spend more than $200 billion annually on AI and data-center investments, with Alphabet guiding over $91 billion for 2025.
- JPMorgan cautions that stretched valuations, heavy index concentration—Magnificent 7 stocks at roughly 38% of S&P 500 value—and a K-shaped consumer backdrop raise downside risks.