JPMorgan Predicts New All-Time Highs for U.S. Markets by Mid-2025 Despite Tariff Concerns

JPMorgan Chase has expressed optimism about the U.S. markets, predicting that they will reach new all-time highs despite the current uncertain market conditions. The bank's mid-year outlook suggests that investors should prepare for volatility and choppy trading conditions, as the administration's tariff policy is expected to pressure economic growth and corporate profits. However, JPMorgan believes that these challenges will not be enough to reverse the stock market's long-term bull market. The administration's investor-friendly proposals, including lower interest rates, lower energy prices, and less regulation, are expected to materialize in the second half of 2025, supporting the continuation of the S&P 500’s uptrend.

According to JPMorgan, key developed market equity markets, including the United States, Europe, and Japan, should make new highs by the middle of next year. The bank notes that equity markets have a tendency to climb the proverbial ‘wall of worry,’ and the current market conditions are no exception. The technology sector, in particular, is expected to play a significant role in the stock market’s ascent to new all-time highs. JPMorgan believes that tech stocks will get a “second wind,” driven by solid earnings, relatively discounted valuations, and the development of artificial intelligence. The bank highlights that while the Mag 7 stocks do not appear cheap at a 26x forward price-to-earnings multiple, their valuations relative to the rest of the market are at their lowest levels of the last 10 years. Additionally, the administration’s decision to exempt semiconductors and other electronic products from tariffs is seen as a positive signal for the technology sector.

Despite the long-term bullish outlook, JPMorgan Chase CEO Jamie Dimon has warned investors about showing “extraordinary optimism” after the S&P 500 rallied by 22% in just a few weeks. Dimon cautions that investors may be overlooking the adverse effects of the administration's tariffs, which could reignite inflation, trigger stagflation, and fuel growing anti-American sentiment abroad. The bank's analysis suggests that while the market is currently surmounting a 'wall of worry' to reach new all-time highs, investors should remain vigilant and prepared for potential challenges ahead. The resilience of key sectors, such as technology, and the broader economic recovery are expected to provide a stable foundation for the market's continued upward trajectory. However, it is important to note that these forecasts are subject to change based on various economic factors and market conditions.