JPMorgan lowered its 2026 year-end S&P 500 (SPX) price target to 7,200 from 7,500 on Thursday, warning that rising oil and gas prices could depress consumer demand. Head of Global Markets Strategy Dubravko Lakos-Bujas noted that further selling pressure could send the benchmark index down to 6,000-6,200 and that the U.S.-Iran war and closure of the Strait of Hormuz could last longer than many expect.
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Trade QQQ with leverageThe firm now has the second-lowest price target on Wall Street, only trailing Bank of America’s forecast of 7,100. The average price target sits at 7,600.
Oil Shocks Signal Recession Risk
Lakos-Bujas pointed out that oil spikes of 30% and greater have historically led to demand destruction and preceded recessions. Demand destruction from four of the five oil shocks since the 1970s preceded recessions.
The firm’s price target still implies upside of 9.5% from current levels. While Lakos-Bujas has warned of near-term downside, he still expects the index to rally later this year, although the gains may be limited by geopolitical tensions.