Banking giant JPMorgan Chase says a key catalyst could send the S&P 500 skyrocketing in 2026.
In a new interview with CNBC, the bank’s head of global market and strategy Dubravko Lakos says the S&P 500 could surge to 8,000 points if the Federal Reserve continues to loosen monetary policy.
“We’re thinking of [8,000 points] more as an upside scenario, and that would be contingent upon the Fed easing more than just one more time, which is part of our base case…
If inflation dynamics do come in better than expected or better than feared, I think in that case, it does open up the left side of the distribution for the Fed in a bigger way. And I do think that risky assets benefit from that.”
If the Fed only eases one more time, Chase places its S&P 500 target between 7,000 and 7,500.
Lakos goes on to say the Fed further cutting interest rates could help boost the ailing 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 running segments that are very hot.
But at the same time, there [are] other segments that are actually quite lackluster, and I think that interest rates could help ease various parts of the economy that are under stress.”
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