If Fed eases further, S&P 500 could pass 8,000 in 2026, says JPMorgan's Lakos

Market Outlook - JP Morgan suggests S&P 500 could surpass 8,000 next year if the Fed eases further due to improving inflation dynamics [2] - The base case is S&P 500 reaching 7,500, driven by one more Fed easing and a prolonged pause [3] - A stronger-than-expected economy, even with Fed rate cuts, should prime the market to perform well [3][4] Sector Analysis - The AI trade is undergoing a digestion period, but broadening out is expected tactically in Q1 [6] - Low-end consumer segments, such as cruise lines, restaurants, and the Las Vegas strip, could see a tactical lift [8][9] - For the medium-term (2026), AI remains central, benefiting big tech hyperscalers, utilities, big banks, and certain parts of healthcare like pharma [10] Risks - The biggest risk is the Fed closing the door to future easing earlier than expected, which could negatively impact markets and the broadening out trade [10][11] - The energy sector is becoming increasingly decoupled from weakening oil prices and is expected to be under downward pressure [11] - Pockets of staples, parts of industrials, and financials outside of banks may not fare well [11]