JPMorgan Chase Says US Markets Climbing ‘Wall of Worry’ To New All-Time Highs – With Key Sector Getting Second Wind

The largest bank in the US believes the S&P 500 will soar to fresh record highs despite uncertain market conditions.

In the bank’s mid-year outlook, JPMorgan says investors should brace for volatility and choppy trading conditions as the firm expects Trump’s tariff policy to pressure economic growth and corporate profits.

But JPMorgan notes that Trump’s tariff won’t be enough to reverse the stock market’s long-term bull market. According to the banking titan, the White House is working behind the scenes to set the stage for the continuation of the S&P 500’s uptrend.

“But that may not stop a bull market. The administration’s more investor-friendly proposals (including lower interest rates, lower energy prices and less regulation) may well materialize in the second half of 2025…

Choppy markets may last for a while, but key developed market equity markets (United States, Europe, Japan) should make new highs by the middle of next year. After all, equity markets love to climb the proverbial ‘wall of worry.'” 

JPMorgan also believes that tech stocks will play a huge role in the stock market’s ascent to new all-time highs. The bank believes that tech stocks will get a “second wind,” propelled by solid earnings, relatively discounted valuations and the development of artificial intelligence.

“But tech stocks could get a second wind: Company earnings are strong, and valuations are not excessive. What’s more, we’re big believers in the long-term potential of AI…

On the valuation front, the Mag 7 stocks do not appear cheap, at a 26x forward price-to-earnings multiple (versus 20x for the broad market). But valuations
relative to the rest of the market are at their lowest levels of the last 10 years. Another positive signal is the Trump Administration’s decision to exempt, for now, semiconductors and other electronic products from tariffs. Indeed, the United States enjoys a tremendous comparative advantage in technological innovation.”

While JPMorgan is long-term bullish on the stock market, CEO Jamie Dimon is warning that investors are showing “extraordinary optimism” after the S&P 500 rallied by 22% in just a few weeks. According to Dimon, investors appear oblivious to the adverse effects of Trump’s tariffs, which he warns could reignite inflation, trigger stagflation and fuel growing anti-American sentiment abroad.

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