JPMorgan Forecasts Strong S&P 500 Gains Despite Tariff Concerns
JPMorgan expects the S&P 500 to deliver a high single-digit return over the next year, maintaining a bullish stance on U.S. equities despite concerns over the economic impact of President Donald Trump’s tariff policies.
Why JPMorgan Is Optimistic
The bank attributes its positive outlook to three main drivers:
- Market Resilience to Economic Weakness
Even as economists revise U.S. GDP growth projections down—from 2.3% to 1.5%—following Trump’s tariff actions in April, the S&P 500 has risen more than 28% in just four months. Investors appear unfazed by softening labor and consumer data, instead focusing on long-term earnings strength and economic recovery. - Robust Corporate Earnings
Over 80% of S&P 500 firms have reported second-quarter earnings, with 82% beating profit expectations and 79% exceeding revenue forecasts—the strongest performance since Q2 2021. JPMorgan notes the index is now on track for 11% annual earnings growth, far surpassing earlier projections of under 5%. - Large-Cap Advantage in Trade War
Larger companies are adapting to Trump’s tariffs more effectively than smaller firms. Some, like Apple, have secured exemptions and announced major investments in U.S. manufacturing. The administration’s proposed 100% tariff on imported semiconductors, unless firms commit to domestic production, has had limited negative impact on major players.
Additionally, the One Big Beautiful Act (OBBA) is boosting cash flow by allowing firms to fully depreciate business investments and expense R&D costs—benefits that primarily favor large corporations.
As a result, JPMorgan continues to overweight large-cap stocks in sectors like tech, financials, and utilities, which it views as best equipped for the evolving trade and economic landscape.
Implications for Crypto
JPMorgan’s equity optimism may also support crypto markets, which often move in tandem with risk assets. The Trump administration’s crypto-friendly stance has helped lift sentiment, particularly after the SEC ruled that certain forms of liquid staking fall outside securities regulation.
Ether, which has jumped 50% in the past month and now trades above $4,200, could benefit further if staking-based ETFs gain regulatory approval.
