JPMorgan is optimistic about the S&P 500 despite the impact of Trump's tariffs.

JPMorgan maintains an optimistic view on American stocks, although some experts warn that the American economy is beginning to feel the impact of the tariffs imposed by President Donald Trump.

The bank forecasts that the S&P 500 will rise by “a high single digit” in the next 12 months due to 3 main factors:

1. The market overlooks signs of economic downturn, focusing on solid corporate profits and recovery prospects. Although the forecast for U.S. GDP growth in 2024 has been downgraded from 2.3% to 1.5% since Trump imposed tariffs, the S&P 500 has still risen over 28% in the past four months.
2. Business results exceed expectations: More than 80% of companies in the S&P 500 have reported their Q2 earnings, with 82% surpassing profit forecasts and 79% exceeding revenue forecasts, the strongest since Q2/2021. Full-year profit growth has been raised from below 5% to 11%.
3. Tariffs have less impact on large corporations: Due to their negotiation power, flexible supply chains, and tax exemptions, they can even turn tax policies into advantages. For example, Apple was exempt from Indian import duties and increased its manufacturing investment in America by an additional $100 billion, with its stock rising nearly 9% last week.

In addition, corporations benefiting from the OBBA policy allow for 100% depreciation and domestic R&D expenses to be recognized immediately, helping to increase free cash flow by more than 30%.

JPMorgan’s strategy prioritizes large-cap stocks in the technology, financial, and utility sectors.

Crypto perspective: A positive outlook on securities could support cryptocurrencies as they often fluctuate in the same direction. The Trump administration appointed many crypto-friendly officials, and the SEC has just ruled that liquidity staking ( under certain conditions ) is not subject to securities law, raising hopes for the approval of a spot Ethereum ETF.