JPMorgan Chase & Co.'s trading desk remains optimistic about the S&P 500 Index's performance, expecting a continued rally even as the market experiences a record-setting spree that has raised concerns about inflated share prices and a resurgence of meme-stock froth. Andrew Tyler, the bank’s head of global market intelligence, noted that while universal bullishness isn't yet present, even previously bearish clients are becoming more confident.
This sentiment is reinforced by a recent dip in the S&P 500's P/E multiple below 20x and improved earnings revisions during a 10% market correction following the start of the conflict in the Middle East. Furthermore, the VIX volatility index recently breached 30, a level historically associated with strong forward-looking returns. Historical analysis shows that investors who bought the S&P 500 when the VIX closed above 30 have seen positive returns between 70% and 83% of the time, with an average gain of 12.4% over the subsequent six months.
This perspective comes as S&P 500 futures jumped 1%, influenced by easing war jitters and upcoming Big Tech earnings reports. The firm suggests that small- and mid-cap stocks could also see a rebound as energy price concerns diminish, presenting an opportunity for long-term investors to increase their holdings in US equities. JPMorgan's outlook, as of July 24, 2025, emphasizes that the furious rally in US equities is likely to persist.
