Trump's Bull Market is Over? Not a Chance! JPM Says S&P Can Rally 22% From Here

Inflation increased in the latest Consumer Price Index report, and producer prices continued climbing, increasing concern that companies may pass costs to consumers. Consumer confidence fell to the lowest level in 75 years. Despite these warning signs, the stock market has not broken down and the S&P 500 remains near historically high valuations after a strong rebound from last year’s April crash. JPMorgan Private Bank acknowledges risks from higher inflation, slowing consumer activity, and stretched valuations, with the S&P 500 trading around 25 times forward earnings versus a historical average near 17 to 18. The outlook argues that pullbacks have repeatedly fueled further advances, and a 22% rise is described as entirely plausible under a bullish economic and earnings backdrop.

"Inflation ticked higher again in the latest Consumer Price Index report from the Bureau of Labor Statistics. Producer prices are climbing, too, raising concerns companies may eventually pass those costs onto consumers. The University of Michigan's consumer confidence index recently hit its lowest reading in 75 years . Meanwhile, the S&P 500 trades near historically elevated valuations after a massive run higher after last year's April's crash."

"The core argument JPMorgan is making runs directly against the current mood on Wall Street. The bank acknowledges risks are building. Higher inflation, slowing consumer activity, and stretched valuations are all real concerns. Granted, the S&P 500 currently trades around 25 times forward earnings - well above its historical average closer to 17 or 18 times, according to FactSet data."

"Yet JPMorgan argues that every pullback is setting the market up for the next advance. That matters because investors have repeatedly expected this rally to collapse under the weight of higher interest rates, slowing growth, or geopolitical stress. Instead, each dip has become another buying opportunity."

"Importantly, JPMorgan does not call its 22% upside target the "base case" scenario. Rather, it describes the move as "entirely plausible" under a bullish economic and earnings backdrop. In other words, the"

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