JPMorgan says S&P 500 is headed for outsized gains despite tech rout
JPMorgan Private Bank sees bullish signals ahead.
The short version
- More than 50 percent of S&P 500 stocks hit new highs.
- Better market breadth usually brings more gains.
- Check your portfolio for a possible rebound.
Amid a brutal week in the tech sector, the S&P 500 is flashing one sign that better days are coming: improving market breadth, according to Business Insider. The tech sector is still getting pummeled by fears around artificial intelligence, but JPMorgan Private Bank, the wealth management arm of JPMorgan Chase, sees one bullish signal in the benchmark index that suggests the market is soon headed for a rebound.
In a recent note, strategists at the bank pointed to increased market breadth, a measure of the number of winning stocks relative to losing stocks in the S&P 500. For a long time this year, breadth has been narrow, with just a few big names driving the gains at the index level while the majority of stocks struggled.
The percentage of stocks in the index that have hit a new 20-day high has risen to over 50 percent. It is the first time market breadth has risen that high since the second quarter of 2025, around the time the market was making a historic comeback after a tariffs-fueled market crash.
The extent to which market breadth has increased recently has historically been followed by more gains in the market over the next three-month and six-month periods, the bank added. JPMorgan recently lifted its year-end target for the S&P 500 to 8,000, implying 5 percent upside to the index current levels.
It has been a rough few weeks for US stock investors, with the S&P 500 and tech-heavy Nasdaq 100 on track to end October in the red amid several rounds of heavy selling in the artificial intelligence trade. Fears around artificial intelligence capital expenditures have been widespread, with investors worried that big technology firms may be spending too much. Check your retirement accounts and investments to see how your holdings are positioned for the coming months.
