Dell, Urban Outfitters and Autodesk rise premarket; Deere and HP fall
Investing.com -- The S&P 500 could climb far beyond current expectations if the Federal Reserve cuts rates more aggressively, according to JPMorgan.
In a 2026 Global Equity Outlook note, analyst Dubravko Lakos-Bujas said it is “positive on global equities expecting double-digit gains across DM and EM supported by robust earnings growth, lower rates, and declining policy headwinds.”
Get more stock market views from Wall Street analysts by upgrading to InvestingPro - get 55% off today
Lakos-Bujas highlighted the United States as the key driver of global performance, saying “the U.S. is set to remain the world’s growth engine,” powered by a “resilient economy and an AI-driven supercycle that is fueling record capex and rapid earnings expansion.”
The bank added that companies and governments worldwide are racing to invest in artificial intelligence “out of fear of becoming obsolete (‘FOBO’).”
For U.S. stocks, JPMorgan said it is “constructive on the S&P 500’s outlook both in terms of price target (7,500 by YE26) and above-trend earnings growth of 13-15% for at least the next two years.”
The forecast assumes two additional rate cuts followed by a pause. But the bank said there is even greater upside if inflation continues to improve and the Fed eases further. In that scenario, JPMorgan said “the S&P 500 surpassing 8,000 in 2026” is possible.
The analyst acknowledged concerns about lofty valuations and the potential for an AI bubble but argued that “current elevated multiples correctly anticipating above-trend earnings growth, an AI capex boom, rising shareholder payouts, and easier fiscal policy.”
He added that benefits tied to deregulation and AI-related productivity gains “remain underappreciated.”
While JPMorgan sees strong market momentum, it also warned that disruption from AI is unfolding in “an already unhealthy K-shaped economy,” with polarization likely to intensify and investor sentiment vulnerable to “sharp swings.”