Could the S&P 500 Reach 8,000 in 2026, according to JPMorgan?

JPMorgan is entering the new year with high expectations for the stock market.

Strategist Dubravko Lakos-Bujas set a year-end 2026 target for the S&P 500 at 7,500 points, citing double-digit earnings growth and expectations of two more Federal Reserve rate cuts “followed by an extended pause.” Lakos-Bujas’ forecast implies a 10.9% gain from Tuesday’s close.

This would bring the S&P 500 to record levels after an already strong 2025. The benchmark is up 15% year-to-date, thanks to significant capital flows into artificial intelligence-related stocks. These stocks recently faced pressure due to valuation concerns, but most remain substantially higher for the year.

“Despite concerns about an AI bubble and high valuations, we see current elevated multiples correctly anticipating above-trend earnings growth, an AI infrastructure investment boom, rising shareholder payouts, and easier fiscal policy,” Lakos-Bujas wrote. “Additionally, earnings benefits from deregulation and broader AI-driven productivity gains remain underappreciated.”

The strategist added that even stronger gains could be possible. “Should the Fed ease policy more than expected,” the S&P 500 could surpass 8,000 points in 2026, he said. That would be about 18% above Tuesday’s close.

Expectations for Fed rate cuts surged this week after weaker-than-expected U.S. economic data. According to CME Group’s FedWatch tool, traders are pricing in more than an 80% chance of a quarter-point reduction in December.

What to Buy

JPMorgan has compiled a basket of AI and data center beneficiaries that they believe could outperform the market in 2026. The stocks included are:

• Amazon
• Nvidia
• Alphabet (Google)

Amazon shares are up only 4.7% this year, lagging the S&P 500. Nvidia has surged more than 32% in 2025, though it is down over 12% in November due to increased competition in the AI sector. Alphabet has risen more than 70% in 2025, after nearly doubling over the past six months.