JPMorgan’s 3 Explosive Reasons Why the S&P 500 Is Headed for New Highs
Wall Street’s biggest bull just doubled down—here’s what’s fueling the fire.
1. Liquidity Tsunami: The Fed’s backdoor money printer is running hot, and guess where it’s flowing first?
2. Earnings Surprise: Corporate America’s ‘meh’ guidance can’t hide the beat-and-raise addiction.
3. Shorts Getting Squeezed: Bears are trapped in a FOMO rally—again. (Some things never change.)
Bottom line: The market’s climbing a wall of worry—and JPMorgan’s trading desk is cashing the checks. *Cue the ‘irrational exuberance’ speech no one will listen to.*
The winners and losers
According to JPMorgan, while Wall Street analysts initially projected earnings growth below 5%, the index is now on pace for an impressive 11% growth rate. This robust showing supports the ongoing bullish trend in the stock market.
"The full-year earnings expectations for both this year and next have already started to turn higher," analysts at JPMorgan's wealth management said in a market note on Friday, adding that the market is increasingly differentiating between the winners and losers of the Trump trade war.
Additionally, the market is now figuring out and pricing in which companies are getting hit most by U.S. tariffs. So far, it looks like mega corporations will be just fine. This could bolster the case for further positive sentiment in the markets.
JPMorgan analysts explained that consumer-facing and smaller companies with restrained bargaining power against their trading partners and rigid supply chains are facing a stagnant earnings outlook.
This ties to JPMorgan's last catalyst: Trump's tariff bark is proving worse than its bite for large firms, which are managing to secure exemptions and even turn the tariff policies, aimed at sparking a manufacturing boom, into a tailwind.
"The latest example is President Donald Trump’s suggestion that imported semiconductors WOULD be taxed at a 100% rate unless the companies commit to relocating production to the United States. Another sign? Apple products are exempted from the latest tariff rates on Indian goods. Indeed, the company also announced an additional $100 billion investment in U.S. manufacturing facilities. The stock gained almost 9% this week. Tariffs are not happening in a vacuum," analysts explained.
Big firms gain an additional advantage from the One Big Beautiful Act (OBBA), under which firms can claim 100% bonus depreciation for purchases of qualified business property and immediate expense of domestic research and development costs. According to some analysts, the depreciation policy could increase free cash FLOW for some by over 30%, which could incentivize more investment.
The bank added that its investment strategy remains focused on large-cap equities, particularly in the technology, financials, and utilities sectors, which it believes are best positioned to navigate this new economic environment.
The crypto angle
JPMorgan's positive outlook for stocks could bode well for cryptocurrencies, as both tend to MOVE in tandem. The digital assets market has plenty going on for itself, with the Trump administration appointing pro-crypto officials to key regulatory positions.
Recently, the U.S. Securities and Exchange Commission (SEC) ruled that liquid staking, under certain conditions, falls outside the purview of Securities Law. The ruling has raised hopes for staking spot ether ETFs winning regulatory approval.
Ether has rallied over 13% to over $4,200, reaching levels last seen in 2021. Prices surged nearly 50% last month, CoinDesk data show.
