Can the S&P 500 Get to 8000? These Experts Say Yes—But It'll Take Big Rate Cuts

Core Insights - The S&P 500 is expected to finish 2026 at 7500, indicating a 10% rise from current levels, with two interest-rate cuts anticipated from the Federal Reserve next year [1][4][6] - Prediction markets suggest a higher probability of three interest-rate cuts by December 2026, with expectations of rates decreasing by three-quarters of a percentage point next year [2] - Concerns are rising regarding potentially lower annual returns for stocks, particularly as the S&P 500's valuations have been driven by artificial intelligence-linked stocks [4][5] Interest Rate Expectations - JPMorgan's analysts predict that further interest rate cuts could lead to an 18% gain for the S&P 500, matching its recent year-to-date rise [1][4] - The Federal Open Market Committee would need to implement more than a half-percentage point cut to significantly boost the benchmark stock index [6] Market Dynamics - The average annual return of the S&P 500 has been around 10% since the late 1950s, and JPMorgan's outlook suggests another year of double-digit gains is possible [4][6] - The concept of "FOBO" (Fear of Becoming Obsolete) is driving corporate and government spending on artificial intelligence, which is expected to yield results by the end of 2026 [5]