S&P 500 could surpass 8,000 next year, says JPMorgan

(Sharecast News) - In its global equity outlook for 2026, JPMorgan said on Wednesday that the S&P 500 could surpass 8,000 next year. "We are 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 (2026 and 2027 EPS of $315 and $355 versus consensus of $309 and $352, respectively)," the bank said.

"This outlook is anchored on our JPM Economics view of two more cuts followed by an extended pause. However, should the Fed ease policy further (due to improving inflation dynamics), we see greater upside with the S&P 500 surpassing 8,000 in 2026."

JPM said that despite AI bubble and valuation concerns, current elevated multiples are correctly anticipating above-trend earnings growth, an AI capex boom, rising shareholder payouts, and easier fiscal policy.

"More so, the earnings benefit tied to deregulation and broadening AI-related productivity gains remain underappreciated," the bank said.

More broadly, JPM said it was positive on global equities, expecting double-digit gains across developed markets and emerging markets, supported by robust earnings growth, lower rates, and declining policy headwinds.

"The US is set to remain the world's growth engine, driven by a resilient economy and an AI-driven super cycle that is fuelling record capex and rapid earnings expansion," it said.