Banking behemoth JPMorgan Chase is raising its year-end forecast for the S&P 500 for two main reasons.
A group of banking experts led by Dubravko Lakos-Bujas predicts that the S&P 500 will end 2026 at 7,600, from the previous level of 7,200. reports Bloomberg.
The group hopes to capitalize on investor interest in the Artificial Intelligence (AI) sector and rising threats in the Middle East as the war between the United States and Iran could end.
The bank now forecasts 2026 S&P 500 EPS (earnings per share) at $330, an increase from the previous forecast of $315, and the estimate for 2027 is now $385 from $355.
These revised forecasts leave multiple benefits, or estimates, unchanged at 22x.
However, Lakos-Bujas says that if global tensions peak quickly, multiples could grow as much as 23x, raising the S&P500’s 2026 index to around 8,000.
The group says that research firm Anthropic contributed to the resurgence of AI economic headlines when it previewed on April 7th its latest AI Mythos series. Since then, 66% of S&P stocks related to AI have outperformed.
Despite the optimism, the group warns that the market could enter a “short-term consolidation phase before starting to recover” due to risks, including oil prices that remained and continued international tensions, even if they have changed.
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