JPMorgan Sees S&P 500 at 8K if Geopolitics Cool and AI Hype Holds

The market has a new peak to chase, but the path is thin on conviction. Just weeks after slashing its year-end target for the S&P 500 to 7.2K on Iran war fears, JPMorgan has reversed course by lifting its forecast to 7.6K. Additionally, it now also sees a path to 8K levels, as the AI trade roars back with investor appetite hitting early-2025 levels and earnings optimism adding fuel.

• 66% of S&P 500 AI names have outperformed since Apr. 7, driven by buzz around Anthropic’s Mythos and anticipation for OpenAI’s Spud.
• The path to 8K hinges on forward earnings multiple re-expanding from 22x back to 23x — something JPMorgan says only a swift geopolitical resolution can deliver.

T&C applied: Strategists led by Dubravko Lakos-Bujas called the recent ~10% pullback a “clearing event,” with buybacks at lower levels forcing investors to chase the rebound. But with risks still lingering, JPMorgan warns there’s a “meaningful risk” of a short-term consolidation before any sustained move higher. So keep the seatbelt on, this could get choppy.