JPMorgan Sets S&P 500 Target at 7500 for 2026, Highlights Need for Aggressive Rate Cuts
JPMorgan analysts project the S&P 500 could reach 7500 by the end of 2026, contingent on significant Federal Reserve rate cuts. The bank's baseline scenario assumes two quarter-point cuts next year, which WOULD support a 10% rise in the benchmark index. More aggressive easing—three or more cuts—could propel gains to 18%, matching this year's rally.
Market pricing reflects skepticism about deeper cuts. CME FedWatch favors two cuts by December 2026, while prediction markets see slightly higher odds of three reductions. The disconnect underscores the fragile equilibrium between equity valuations and monetary policy.
AI-driven stocks continue to inflate index multiples, raising concerns about sustainability. Investors accustomed to double-digit returns may soon face tougher choices as traditional equity growth moderates.
