JPMorgan has set its 2026 S&P 500 (SPX) price target to 7,500, although the firm believes the benchmark index could exceed 8,000 if the Fed cuts rates more than expected. That implies upside of at least 17% from current levels.
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Alongside rate cuts, JPMorgan also cited AI developments, strong earnings growth, and easing policy pressures as positive catalysts in its 2026 Global Equity Outlook.
Tame Inflation Could Accelerate Rate Cuts, Boost Stocks
The Fed is widely expected to cut rates by 25 bps to 3.50%-3.75% next month, although the outlook for 2026 is less certain. By the end of 2026, there is a 27.4% chance of the rate falling to 2.75%-3.00% and a 26.8% chance of a 3.00%-3.25% rate, according to CME’s FedWatch tool.
JPMorgan expects the Fed to cut rates two more times before pausing. However, easing inflation could influence the central bank to cut rates even faster, which would provide a tailwind to stocks that could drive the S&P 500 to 8,000 and beyond.
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