Bank for millionaires in a pessimistic scenario awaits a 30% share collapse. The risk is in AI

Strategists of the American JPMorgan Private Bank, which serves wealthy clients, published their forecast for the U.S. stock market in 2026, writes Bloomberg. Here is what their review says:

- The "bearish" scenario assumes that the S&P 500 index could collapse by 32% from its current level to 4,600 points by the end of next year. This scenario is based on the assumption that investors' hopes for AI and economic stability will not be realized. According to Jacob Manoukian, a strategist at JPMorgan Private Bank, for all the benefits that artificial intelligence creates, there is also a "huge risk" that investment in these technologies will not pay off or that their pace of development will slow. On the macroeconomic front, a potential problem for investors could be the threat to Fed independence if U.S. inflation accelerates again and the central bank faces political pressure, strategist Stephen Parker wrote;

- The base case scenario of JPMorgan Private Bank strategists nevertheless assumes accelerating economic growth, strong corporate reports and sustainable development of AI next year. These factors, according to the forecast, will push the S&P 500 index to 7,400 points, about 9% above the current level;

- In an optimistic scenario, under the influence of the same factors, the S&P 500 index could grow by 20% from its current level to 8200 points by the end of next year.

Since the start of 2025, U.S. stocks are up 16%, compared with a 23% gain in each of the previous two years. Strategists at JPMorgan Private Bank said the recent selloff in stocks, which has caused the S&P 500 to pull back about 5% from its October peak, confirmed that markets are not experiencing the kind of euphoria typically associated with bubbles. "We see this as a buying opportunity, but at the same time recognize that the bottom may not have been broken yet," Parker said in an interview with Bloomberg.

They also have a positive outlook for next year. JPMorgan strategist Dubravko Leikos set a target for the S&P 500 index at 7,500 points, which is 11% above current quotes, CNBC writes. The strategist expects double-digit corporate earnings growth and two more Fed rate cuts before the "long pause." If the Fed eases policy more aggressively, the S&P 500 could rise 18% and exceed 8,000 points by the end of next year, he believes.

Deutsche Bank earlier this week also predicted the S&P 500 index would rise to 8,000 points by the end of next year, noting the growing enthusiasm around AI. Morgan Stanley expects stocks to rise 15% from current levels to 7,800 points.

HSBC, like JPMorgan, expects the market to rise to 7500 points, writes Yahoo Finance. The driver of the rally, according to HSBC analysts, will be an investment boom in the field of artificial intelligence. And Societe Generale set the target at 7300 points, which implies the growth of the index by a modest 8%, writes Bloomberg.

This article was AI-translated and verified by a human editor