JPMorgan urges investors to ride equity wave through late 2026 – report

JPMorgan’s asset-management business is telling investors to keep exposure to equities and other riskier assets in the latter half of 2026, reported Bloomberg.

The financial giant is arguing that heavy investment linked to AI and steady consumer spending should help the expansion continue even with sticky inflation and a Federal Reserve that stays put.

That stance goes against wider worries that this year’s strong rise in share prices has left stock markets open to a correction.

In its midyear outlook for 2026, JPMorgan Asset Management, which oversees $4.3tn, said the economy is gaining strength as businesses increase outlays on AI infrastructure.

It also said spending by wealthier consumers remains firm, aided by the wealth effect from higher equity and property values.

“The good news in terms of baseline forecast is we think the economy will strengthen in the middle of the year,” said David Kelly, chief global strategist at JPMorgan Chase asset-management.

He added that strength should be helped in part by income tax refunds, as well as AI spending.

Kelly said growth through the fourth quarter depends on further fiscal support from Washington, although the team’s base case is that Democrats retake control of the House, reducing the chances of stimulus in 2027.

“It’s an OK economy for Americans; it’s a great economy for the stock market,” he said.

“The only thing that really matters for equities are profits and interest rates. And profit growth has been spectacular.”

Kelly said the 2026 investment setting is marked by a clash between rising political and economic risks and backing from AI-led spending.

“That really encapsulates where we find ourselves in the economy and financial markets in the middle of 2026,” Kelly said.

“There are plenty of cross currents,” he added, citing sky-high market valuations, economic nationalism, political polarisation, Middle East conflict, as well as immigration issues and tariff risks.