JPMorgan Private Bank’s Bull Case Has S&P 500 Up 20% by 2027

The 4% rally in US stocks over the past four days has quieted bears warning a full blown correction was in the offing — and now equity bulls are strutting again.

JPMorgan Chase & Co.’s private bank says the S&P 500 Index is poised to continue its multiyear streak of robust returns in 2026. It’s up 16% so far this year after gains of at least 23% in the prior two. It closed at 6,812.61 on Wednesday.

The firm’s base-case view is that a re-acceleration in economic growth, strong earnings and steady development of artificial intelligence technology will power the gauge up to 7,400 next year, a gain of some 9% from current levels. If those tailwinds are strong enough, the index could soar to as high as 8,200, implying a 20% surge from now through the close of next year.

The optimistic call landed as Wall Street’s nerves were frayed by concerns around the AI narrative and signs of economic sluggishness. To Jacob Manoukian, US head of investment strategy and Stephen Parker, co-head of global investment strategy, the recent market turbulence that took the S&P 500 as much as 5% from its October record confirms that markets are not experiencing the euphoria typically associated with bubbles.

“A lot of our clients are sitting on a lot of cash right now, and for those clients, the conversations that we’re having with an eye out 12 to 18 months is that this is an opportunity,” Parker said in an interview on Tuesday. “We’re looking at this as a buying opportunity, while also recognizing that it’s not necessarily the bottom.”

The bank favors technology and utilities as top areas to target in 2026, as the two will benefit from AI. In addition, health care, industrials and financials are poised to perform well thanks to a variety of catalysts including market broadening, deregulation and deal-making.

The firm is also advising clients to incorporate “diversifiers and shock absorbers” like infrastructure, real assets and gold to help guard against inflation. It said the private markets will continue to provide opportunities to generate returns.

“We just believe we’re in a more structural shift where the difference between public and private is starting to grow narrower and narrower,” Manoukian said. “And if you want to think about investing in a thematic way, by not having exposure to private markets, you’re kind of cutting yourself off to some of the most dynamic and innovative sectors of the AI ecosystem.”

The private bank’s positive outlook is consistent with the view of its investment bank’s equity research team. Strategist Dubravko Lakos-Bujas sees the S&P 500 rising about 10% from its current level to 7,500 points by the end of 2026, boosted by robust earnings growth and Federal Reserve interest-rate cuts — and potentially reaching 8,000 should cooling inflation allow officials to ease monetary policy more than twice.

Early outlooks from financial shops show forecasters are bulled up heading into 2026. Deutsche Bank’s Binky Chadha sees the S&P 500 jumping about 18% to 8,000 by the end of 2026. Morgan Stanley strategists led by Michael Wilson expect the index to rally to 7,800 a year from now.

Despite the resounding positivity from JPMorgan’s private bank heading into the new year, the strategists consider a bear-case scenario in which the S&P 500 could fall to as low as 4,600, a roughly 32% drop, should the AI theme and economy falter.

To Manoukian, as much as there is opportunity with the technology, there’s also “tremendous risk” if models start to plateau or spending isn’t monetized. To Parker, Fed independence is a potential concern on the macroeconomic front if inflation re-accelerates and officials feel political pressure to keep easing. But for now, earnings and a resilient economy are keeping their expectations upbeat.

“There’s a really simple, compelling story of markets this year, which is Corporate America just exceeded expectations every single quarter and drove a 15% price return for the S&P without a lot of multiple expansion,” Manoukian said. “We expect that same earnings-driven return profile for next year.”