Xiao Mo: Assuming the Federal Reserve cuts interest rates twice next year, it forecasts that the S & P 500 index will target 7,500 points by the end of next year

According to JPMorgan's U.S. Stock Market Outlook 2026, the investment focus for 2026 is focused on several core themes, including long-term growth from artificial intelligence (AI) and data center expansion, tailwinds from infrastructure building and electrification, and the continued pursuit of high-quality growth and operational resilience. The report recommends that investors pay particular attention to companies with strong pricing power, long-term growth momentum, solid balance sheets, and the ability to benefit from structural trends such as data center expansion and infrastructure investment. The bank forecasts an S & P 500 target of 7,500 points by the end of 2026 and expects above-trend earnings growth for at least the next two years (earnings per share are expected to be $315 in 2026 and $355 in 2027, with consensus market expectations of $309 and $352, respectively). This outlook is based on the assumption by JPMorgan's economics department that the Federal Reserve will cut interest rates two more times, followed by a prolonged policy pause. However, if improving inflation conditions lead to further rate cuts by the Federal Reserve, the S & P 500 is expected to break through 8,000 points.