Banking giant JPMorgan Chase says a major catalyst could see the S&P 500 skyrocket in 2026.
In a new interview with CNBC, Dubravko Lakos, the bank’s head of global markets and strategy, says the S&P 500 could rise to 8,000 points if the Federal Reserve continues to ease monetary policy.
‘We’re thinking about [8,000 points] more like an upside scenario, and that would depend on further Fed easing, which is part of our base case…
If inflation dynamics turn out better than expected or better than feared, I think in that case the left side of the distribution will open up to the Fed in a bigger way. And I think risky investments benefit from that.”
If the Fed eases just one more time, Chase will place its S&P 500 target between 7,000 and 7,500.
Lakos also says that a further cut in interest rates by the Fed could help stimulate distressed parts of the economy.
“I think the economy should be in good shape next year. But I also think it’s a K-shaped economy, so I think there are certain segments of running that are very popular.
But at the same time there [are] other segments that are actually quite lackluster, and I think interest rates can help alleviate different parts of the economy that are under pressure.”
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