JPMorgan Chase Traders Forecast S&P 500 at 6000 Points, Warn of 50% Tariffs

JPMorgan Chase traders have outlined a scenario where the S&P 500 index could first break through 6000 points, driven by factors such as the activation of CTA strategies, accelerated stock buybacks, and increased retail investor participation. However, they caution that if high tariffs persist and investors remain pessimistic about the medium-term outlook, the market could retest its lows.

JPMorgan Chase traders have painted a detailed path for the S&P 500 index to reach 6000 points. They suggest that with the activation of CTA strategies, accelerated stock buybacks, and continued buying by retail investors, the index could surpass 5800 points. This would force hedge funds to enter the market, potentially driving the S&P 500 to 6000 points. However, they also warn that if the index reaches 6000 points, it could represent a near-term peak, with a bearish outlook for the medium term.

JPMorgan Chase traders agree with the prevailing view of an economic slowdown, predicting a significant decline in key economic indicators such as non-farm payrolls and retail sales over the next 1-2 months. They outline two possible narratives that could emerge as the economy weakens: one where tariffs remain high and trade agreements are still being negotiated, and another where multiple agreements are signed, and the economic soft landing is seen as a temporary phenomenon. They believe the first scenario is more likely, as the probability of signing an agreement before the 90-day tariff suspension expires is low. This could become a significant headwind for U.S. stocks.

Overall, JPMorgan Chase believes the market could retest its lows as it declines. As the market falls, the earnings per share expectations for the S&P 500 index could be revised downward. However, if large-cap technology stocks perform well, the index could remain above the 5000-5150 range. JPMorgan Chase traders have also outlined a potential path for the S&P 500 index to fall to 5000 points, which would be the result of a significant deterioration in macroeconomic data and unresolved trade relations. This path could involve immediate weakness in macroeconomic data, such as a services ISM below 50 and negative year-over-year retail sales, followed by unresolved key trade relations and higher-than-expected industry tariffs on healthcare and semiconductors, ranging from 50% to 100%.