JPMorgan Chase: S&P 500 Index Expected to Reach 9,000 by Mid Next Year

BlockBeats News, May 25th - In its latest report, JPMorgan Chase stated that although it is not its base case scenario, driven by the continuation of the technology capital expenditure cycle, the expanding AI-related profit contribution, and improving market risk appetite, the S&P 500 index is expected to rise to 9,000 points by mid-2027.

The institution believes that the market may currently underestimate the probability of this upward scenario. If the index rises to 9,000 points, it would mean there is still about a 20% upside potential from the current level. The report stated that the Technology, Media, and Telecom sectors are still the core variables driving the index further upwards, especially whether AI investments can continue to translate into corporate revenue and profit growth, which will determine whether the U.S. stock market can enter the next upswing phase.

However, there is a clear divergence of views within the market. The mainstream Wall Street view is that after the rapid rebound from the March low, the U.S. stock market is likely to enter a period of consolidation in the short term. The continued rise in global bond yields will dampen consumer spending and business investment, thereby dragging down economic growth. The energy shock caused by the Iran situation will push up inflation, raise fuel prices, and become a key risk factor that central banks around the world focus on.

Furthermore, from a historical trend perspective, it is difficult for a market with high returns for multiple years to sustain such performance in the long term. Melissa Brown, Managing Director of Investment Decisions Research at SimCorp, cited long-term market data indicating that since 1926, U.S. stocks have only achieved annual returns exceeding 15% for four consecutive years three times, making such scenarios very rare.

Brown also pointed out that after three consecutive years of annual returns exceeding 20%, the average return rate in the fourth year is only 3.9%, far below the historical average level of 11.8%. She acknowledged that historical data cannot definitively determine this year's trend, and the AI-related sector still has the potential to drive the overall market strength. But if this year indeed achieves low double-digit growth, the probability of the market continuing to rise next year will further decline.