BlockBeats news, on May 25, JPMorgan stated in its latest report that, although this is not its base case scenario, the S&P 500 could rise to 9,000 by mid-2027, driven by an extended technology capital expenditure cycle, growing profit contributions from AI, and improved market risk appetite.
The institution believes the market may currently be underestimating the probability of this upside scenario. If the index rises to 9,000 points, it would imply approximately another 20% upside from current levels. The report states that the technology, media, and telecommunications sectors remain the key drivers for further index gains, particularly whether AI investments can continue to translate into corporate revenue and profit growth, which will determine whether U.S. equities can enter the next upward phase.
However, there is significant divergence of opinion within the market. The mainstream view on Wall Street holds that, following its rapid rebound from the March low, U.S. equities are likely to enter a period of consolidation in the short term. Continuously rising global bond yields are expected to dampen household consumption and corporate investment, thereby slowing economic growth. Energy disruptions triggered by the situation in Iran, which have elevated inflation and fuel prices, have also become a key risk factor of concern for central banks worldwide.
In addition, historical trends show that periods of consistently high returns are difficult to sustain over the long term. Melissa Brown, Director General of Investment Decision Research at SimCorp, cited long-term market statistics indicating that since 1926, U.S. stocks have achieved annualized returns exceeding 15% for four consecutive years only three times—making such performance extremely rare.
Brown also noted that after three consecutive years of annualized returns exceeding 20%, the average return in the fourth year was only 3.9%, significantly below the historical average of 11.8%. She acknowledged that historical data cannot definitively predict this year’s performance, but AI-related sectors still hold the potential to drive the broader market higher. However, if the market indeed achieves low double-digit growth this year, the likelihood of further upward momentum next year will decrease further.