JPMorgan Forecasts Positive H1 2026 Equity Returns Amid Easing Inflation and Earnings Growth

This analysis centers on JPMorgan’s forecast of positive equity returns in the first half of 2026 [1]. The bank cites key drivers: easing inflation (supported by November 2025 Consumer Price Index (CPI) at 2.7% YoY [1]), steady economic growth, broadening earnings, and December 2025 market consolidation (S&P 500 up 0.68%, NASDAQ up 0.27% during December [0]). Initial market reactions include a 1.01% gain in JPMorgan’s stock (JPM) on January 5 [0], alongside mixed sector performance—Utilities and Energy sectors showed strength, while Tech and Consumer Cyclical sectors declined [0].

• The forecast aligns with broader economic indicators, including the Federal Reserve’s 2026 Core Personal Consumption Expenditures (PCE) forecast of 2.5% [2], signaling ongoing inflation moderation.
• JPMorgan specifically anticipates double-digit returns for developed markets [3], highlighting the potential breadth of gains.
• December 2025 consolidation is viewed as a foundational step for future gains, clearing excess market momentum.
• Information gaps remain, including which sectors JPMorgan expects to lead earnings growth, specific return projections, and the extent to which lingering US labor market concerns could offset positive drivers.

• Risks
  : Lingering US labor market uncertainty (November 2025 unemployment reached a four-year high [1]), Federal Reserve interest rate cut uncertainties, and geopolitical tensions. Key events to monitor include the December 2025 CPI release (January 13), December jobs report (January 9), and the upcoming Q4 earnings season.
• Opportunities
  : Easing inflation may support consumer spending and corporate profitability, while broadening earnings could drive equity gains across multiple sectors.

JPMorgan’s H1 2026 equity forecast points to potential positive returns, with easing inflation and improving earnings as core drivers. Initial market reactions show mixed sector performance but a positive movement in JPMorgan’s own stock. Investors and stakeholders should monitor upcoming economic data releases and earnings reports to assess the forecast’s validity. No prescriptive investment recommendations are provided.