JPMorgan Chase Predicts S&P 500 New Highs Amid Geopolitical Calm Morgan Stanley Sees 7 Stocks Driving Market Recovery

JPMorgan Chase has advised traders to adopt a bullish stance, predicting that the S&P 500 index is poised to reach new record highs. The banking giant attributes this optimism to the de-escalation of geopolitical tensions, particularly between Israel and Iran, which has allowed investors to refocus on market fundamentals. According to JPMorgan Chase, the reduction in geopolitical risks has enabled the market to concentrate on macroeconomic data, earnings per share (EPS) growth, and the potential resolution of trade war rhetoric. This shift has led the firm to adopt a "Tactically Bullish" view, anticipating that resilient macro data and positive EPS growth will drive the market forward.

Meanwhile, Morgan Stanley has identified a specific group of stocks within the S&P 500 that it believes will experience a significant comeback in the coming months. Known as the "Magnificent 7," this group includes Apple, Nvidia, Microsoft, Tesla, Alphabet, Amazon, and Meta. Morgan Stanley's senior portfolio manager, Andrew Slimmon, suggests that these companies are investing heavily in artificial intelligence (AI) and capital expenditures, which are expected to yield substantial returns in the near future. Slimmon argues that despite current concerns about US exceptionalism, the investments made by these companies in AI and other technologies will drive their performance and contribute to a resurgence in the S&P 500 index.

Slimmon's analysis highlights the potential for these seven companies to lead the market recovery, as their investments in AI and other advanced technologies are expected to pay off. He predicts that by the end of the year, the rest of the world may have outperformed the S&P 500, but the Magnificent 7 will ultimately drive the index to new heights. This optimistic outlook is based on the belief that these companies will leverage their AI capabilities to enhance their services and products, thereby attracting more investors and boosting their market performance.