Here Are 3 Bullish Reasons Why JPMorgan Sees S&P 500 Rallying Much Higher

JPMorgan expects a high single-digit rise in the S&P 500 over the next 12 months.

• JPMorgan expects a high single-digit rise in the S&P 500 over the next 12 months.
• The bank cited three bullish catalysts, including resilient corporate earnings.

JPMorgan remains bullish on U.S. stocks even as some observers warn that the economy is beginning to pay the price for President Donald Trump’s tariffs.

The investment banking giant forecasts that the S&P 500, Wall Street’s benchmark index, will yield a “high single-digit return over the next 12 months,” driven by three key factors.

One of the main reasons for optimism is that markets don’t care about signs of an economic slowdown. Instead, traders are focused on resilient corporate earnings and the subsequent economic recovery.

Since President Trump fired the first tariff salvo on April 2, economists have downgraded full-year U.S. growth forecasts from 2.3% to 1.5%. Still, the S&P 500 has gained over 28% in the four months. The index has held steady despite recent economic data revealing softness in the labour market and consumption, as well as stickiness in manufacturing and service sector inflation.

Over 80% of S&P 500 companies have recently reported their Q2 earnings, with 82% surpassing earnings expectations and 79% beating revenue forecasts—the strongest performance since the second quarter of 2021.

“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.

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.

Ethereum prices rose more than 13% to over $4,200, reaching their highest level so far in 2021. Prices have surged nearly 50% in the last month.