JPMorgan Predicts S&P 500 Will Reach 6,500 by 2025

Foreks - JPMorgan (NYSE:JPM) has set a price target of 6,500 for the S&P 500 index for 2025, indicating an 8% upside potential from current levels. This target is driven by a projected 10% earnings growth for the index and a target earnings per share (EPS) of $270 next year. JPMorgan highlights key catalysts for the expected growth, including easing monetary policy, strong capital expenditures focused on artificial intelligence, and expanding market breadth.

Particularly, it is anticipated that smaller companies in the Russell 2000 will also rebound robustly, projecting a 40% increase in earnings following consecutive years of decline. According to JPMorgan's note on Wednesday, the U.S. economy remains crucial for this outlook.

The Wall Street firm emphasizes the theme of "American Exceptionalism," expecting the country to continue its role as a "global growth engine." Strategists led by Dubravko Lakos-Bujas noted, "The story of American exceptionalism may face turbulence and increased volatility due to policy changes in 2025, but opportunities will likely outweigh the risks."

They added, "The benefits of deregulation and a more business-friendly environment are likely being underestimated, with the potential to unlock efficiency gains and capital allocation."

The ongoing increase in artificial intelligence investments, led by tech giants, is also expected to support earnings across sectors. Additionally, JPMorgan underscores the Federal Reserve's recent policy shift, expecting the central bank to cut interest rates by another 100 basis points.