JPMorgan Forecasts Stock Market Resilience Despite Weakening US Dollar in 2026
JPMorgan Chase strategists have stated that the recent weakness of the US dollar is not expected to negatively impact the stock market, as stronger global economic activity and corporate earnings tend to offset currency translation headwinds. The bank maintains a bullish outlook for 2026, forecasting double-digit gains for global equities despite being net bearish on the dollar's value for the year.
Financial Report: JPMorgan Chase & Co (JPM)
JPMorgan Chase closed at $302.55 on February 13, 2026, reflecting a slight daily decline of 0.03%. Despite recent currency volatility, the firm remains a cornerstone of the US financial sector with a market capitalization of approximately $815.74 billion.
Key Insights: Dollar Weakness and Market Outlook
Inverse Correlation: JPMorgan noted that historically, global equity performance—particularly in emerging markets—shows a clear inverse correlation with the dollar. A weaker dollar generally acts as a tailwind for these risk assets.
Resilient Earnings: US equities are underpinned by healthy corporate profits and rapid AI adoption, which are expected to drive above-trend earnings growth of 13–15% for the S&P 500 through 2026.
Monetary and Fiscal Support: The bank anticipates the Federal Reserve will cut rates by approximately 50 basis points in 2026. Additionally, fiscal stimulus from the "One Big Beautiful Bill Act" is expected to boost US growth early in the year.
Recession Probability: While optimistic, JPMorgan analysts forecast a 35% probability of a US and global recession in 2026, citing sticky inflation and potential shifts in labor demand as primary risks.
2026 Price Targets and Forecasts
JPMorgan analysts have set a December 2026 forecast for major currency pairs and commodities, reflecting their bearish dollar stance:
EUR/USD: Expected to reach 1.20.
Gold: Bullish outlook with prices expected to soar to $5,000/oz by Q4 2026.
S&P 500 Earnings: Projected to reach $305 per share, up from $275 in 2025.
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