The market rally has more upside ahead, says JPMorgan's Elyse Ausenbaugh

Market Performance - The S&P 500 was up by better than 7% for the quarter, while the NASDAQ increased by over 11% [1] - The current market momentum is expected to continue into 2026, driven by macroeconomic improvements and AI investments [2] Corporate Earnings and Economic Indicators - Corporate profit margins remain high, supporting earnings growth despite a slowdown in hiring [4][9] - The labor market is characterized as bending but not breaking, with a substantial slowdown in hiring but no significant rise in layoffs anticipated [5][6] Federal Reserve Influence - The market rally is attributed to a combination of the Federal Reserve's rate-cutting cycle and strong corporate performance [3][4] - A gradual rate-cutting cycle is expected to continue into 2026, influenced by the current economic conditions [9] Consumer Spending and Economic Growth - Consumers are faring reasonably well, with positive real wage growth supporting spending, despite a slowdown in wage growth [10] - AI investment is playing a significant role in driving GDP growth, alongside consumer spending [11] Government Shutdown Impact - Historical data suggests that government shutdowns do not significantly impact market performance, with stocks tending to rise [7] - The absence of economic data during a potential shutdown could create confusion in the macroeconomic landscape [8]