JPMorgan Predicts High Single-Digit S&P 500 Gains on Strong Earnings and Policy Tailwinds

JPMorgan has expressed confidence in the continued upward trajectory of the S&P 500, predicting a high single-digit return over the next 12 months [1]. This optimism is rooted in three key factors that the bank identifies as driving the current market momentum. The S&P 500, a key gauge of U.S. equities, has already gained over 28% in the four months since April 2, despite rising concerns over the economic impact of President Donald Trump's tariff policies [1].

One of the main reasons for JPMorgan’s bullish stance is the market’s current focus on resilient corporate earnings. More than 80% of S&P 500 companies have reported Q2 results, with 82% exceeding earnings expectations and 79% surpassing revenue forecasts—marking the strongest performance since Q2 2021 [1]. This outperformance has pushed the full-year earnings growth forecast for S&P 500 firms from below 5% to an estimated 11% [1].

The bank also notes that large corporations are managing to navigate the challenges posed by the Trump administration's tariff policies. Many have secured exemptions or are leveraging the new trade policies to their advantage. For instance, Apple recently received a tariff exemption on Indian goods and announced a $100 billion investment in U.S. manufacturing, which has been reflected in its stock performance [1]. JPMorgan analysts highlight that these firms are also benefiting from the One Big Beautiful Act (OBBA), which allows 100% bonus depreciation on qualified business property and immediate expensing of domestic R&D costs. This policy is estimated to boost free cash flow for some companies by over 30% [1].

JPMorgan’s investment strategy emphasizes large-cap equities, particularly in the technology, financials, and utilities sectors. The bank views these industries as being best positioned to capitalize on the evolving economic landscape and continue delivering value to investors [1].

In addition, JPMorgan’s positive outlook on stocks may have broader implications for the digital assets market. Cryptocurrencies have historically moved in tandem with equities, and a bullish equity market could provide further support to the crypto sector. Recent regulatory developments, such as the U.S. Securities and Exchange Commission's ruling that liquid staking falls outside the scope of Securities Law in certain cases, have raised expectations for the approval of staking spot ether ETFs [1]. This regulatory clarity, coupled with Trump's administration appointing pro-crypto officials to key positions, is seen as a tailwind for digital assets.

The bank’s analysis underscores a market that, while facing macroeconomic headwinds, continues to be driven by strong corporate performance and policy developments that favor large-cap companies. As the market differentiates between firms that are resilient and those that are vulnerable to trade pressures, JPMorgan remains confident in the S&P 500’s ability to deliver solid returns in the coming year [1].

Source: [1] Here Are 3 Bullish Reasons Why JPMorgan Sees S&P 500 Rallying Much Higher (https://www.coindesk.com/markets/2025/08/10/here-are-3-bullish-reasons-why-jpmorgan-sees-s-and-p-500-rallying-much-higher)