JPMorgan released the "2026 U.S. Stock Market Outlook" indicating that the investment focus in 2026 will revolve around several core themes, including long-term growth driven by artificial intelligence (AI) and data center expansion, tailwinds from infrastructure development and electrification, as well as the ongoing pursuit of high-quality growth and operational resilience by companies.
The report suggests that investors should pay particular attention to companies with strong pricing power, long-term growth momentum, robust balance sheets, and those that can benefit from structural trends such as data center expansion and infrastructure investment.
The bank predicts that the target for the S&P 500 index by the end of 2026 will be 7500 points, and expects that earnings will maintain growth above trend for at least the next two years (2026 earnings per share are expected to be $315, and $355 in 2027, while the market generally expects $309 and $352, respectively). This outlook is based on JPMorgan's economic department's assumption that the Federal Reserve will lower interest rates two more times, followed by a long period of policy pause. However, if the inflation situation improves and leads to further rate cuts by the Federal Reserve, the S&P 500 index is expected to break through 8000 points.