JPMorgan Trading Desk Market Forecasts for 2026 by Sector

Last week, JPMorgan, along with most other investment banks, published its various forecasts for 2026. In a separate note, the bank’s market analysis team, led by trader Andrew Tyler — who maintained a persistent (and correct) bullish view on global equities and the economy for most of 2025 — also released its own annotated version of the bank’s forecasts for all asset classes in 2026.

Here is a condensed summary of Tyler’s expectations:

Economy: Global GDP growth is expected to receive a boost in the first half of 2026 from pre-targeted fiscal stimuli concentrated in the U.S. and China. This impulse should support a recovery in market sentiment and a realignment between labor demand and GDP growth. Spending on artificial intelligence is expected to provide a second consecutive year of solid growth in capital investments, but the effects of higher productivity will likely be limited next year.

U.S. growth and inflation in 2026 are expected to be in line with this year’s levels (+1.8% real GDP, +2.7% core PCE inflation). Fed rate cuts are anticipated in January and May, but monetary policy is likely to pause as labor demand begins to strengthen. We forecast faster growth in the eurozone in 2026, as Germany’s fiscal expansion accelerates from Q4 2025, and the earlier ECB rate cuts start to take effect. The inflationary impact of this faster growth is expected to be moderate.

STOCKS: We are positive on global equities and expect double-digit gains in both developed and emerging markets, supported by steady earnings growth, lower interest rates, and easing political headwinds (full note available for Pro subscribers).

In the U.S., we expect earnings growth above trend of 13–15% for at least the next two years, with the S&P 500 reaching 7,500 points by the end of 2026. If the Fed eases policy more than expected (due to improving inflation dynamics), the S&P 500 could exceed 8,000 points in 2026.

In the eurozone, earnings growth of over 13% is expected next year, supported by improving economic momentum, higher operating leverage, reduced trade barriers, easier comparables, and better financing conditions. Investor skepticism and low valuations provide a good starting point.

In Japan, “Abenomics” and corporate reforms are likely to push Japanese equities higher in 2026. Key risks may come from the yen and long-term interest rates.

Emerging market equities are well positioned for strong performance in 2026. China may show initial signs of private-sector recovery; Korea remains supported by corporate governance reforms and AI development; Latin America could see significant growth thanks to strong monetary stimulus and key political changes.

FX: We have a downward bias for the dollar in the first half of 2026 due to Fed asymmetries, twin deficits, and global recovery, though the decline will be limited by U.S. resilience. Risks to dollar strength exist if the Fed is likely to raise rates or if growth elsewhere turns negative. The EUR is expected to rise supported by growth and German fiscal backing (EUR/USD 4Q’25/1Q’26 – 1.16–1.18; 2Q – 1.20), though gains will be more limited compared to 2025. GBP should appreciate (GBP/USD 2Q – 1.41, 4Q – 1.36) if there is no major disappointment from the UK budget. JPY is likely to weaken (USD/JPY 2Q – 158, 4Q – 164) due to the end of easing cycles elsewhere, fiscal expansion, and the potential for further short positions. Global cyclical resilience should support emerging market yields, with no major concerns over positioning or valuations.

RATES: U.S. Treasury yields are likely to be higher by the end of 2026 (10-year UST around 4.35%), as the market has priced in too many Fed rate cuts.

CREDIT: Demand, technical factors, and the macroeconomic environment should support credit spreads. We expect a slight widening of spreads in the U.S. (110 bps for US High Grade bonds, 375 bps for US High Yield) and a slight tightening in Europe (90 bps for HG and 300 bps for HY).

For U.S. high-yield bonds and leveraged loans, the default rate in 2026 is likely to be similar to that of 2025. In emerging markets (EM), spreads on EMBIGD and CEMBI BD are expected to remain largely unchanged through the end of 2026 but have the potential to outperform other credit markets in the first half of 2026.

COMMODITIES: Oil prices are expected to decline (Brent to $56 per barrel by December 2026) as supply grows three times faster than demand. In the absence of interventions, the surplus is projected to reach 2.8 million barrels per day in 2026. Under these conditions, Brent is likely to fall below $60 during 2026, drop to the low $50s in the final quarter, and end the year with a price starting with “4.”

We expect the market to reach equilibrium through a combination of increased demand (supported by lower prices) and a mix of voluntary and involuntary production cuts. In line with this outlook, we maintain our Brent price forecast at $58 ($54 for WTI) for 2026.

We forecast that strong demand—driven by the long-term trend of official reserves and investors diversifying into gold—will push gold prices toward $5,000 per ounce by Q4 2026.

We remain positive on copper ($12,000 per ton in the first half of 2026) and aluminum, supported by sharp supply disruptions and fragmented global inventories.