- JPMorgan predicts new S&P 500 highs within a year despite Trump tariff risks causing market volatility ahead.
- An AI stock surge could lift related crypto projects (FET, RNDR) via shared investor interest and capital.
JPMorgan Chase forecasts the S&P 500 stock index will reach new record levels within the next year. This prediction comes despite the bank’s expectation of unstable market conditions driven by President Trump’s tariff policies.
In its mid-year outlook, JPMorgan advises investors to prepare for market swings and unsettled trading. The bank states these tariffs could hinder economic expansion and reduce company profits.
However, JPMorgan analysts believe these trade measures will not end the stock market’s long upward trend. They suggest the current administration is working on policies designed to support further stock market gains.
“Choppy markets may last for a while,” the report states, “but key developed market equity markets (United States, Europe, Japan) should make new highs by the middle of next year.” The report adds that stock markets often rise despite widespread concerns.
Technology company shares are expected to be central to this projected market increase. JPMorgan argues these stocks could experience renewed growth, fueled by solid company earnings, valuations that appear reasonable compared to historical levels, and ongoing progress in artificial intelligence.
While the largest tech stocks trade at a higher price-to-earnings ratio than the broader market, JPMorgan notes their relative valuation compared to other stocks is the lowest in ten years. The bank also views the decision to temporarily exclude semiconductors from new tariffs as a positive factor, citing US strength in technology development.
Despite this long-term positive view, JPMorgan CEO Jamie Dimon cautions that current investor sentiment shows “extraordinary optimism” after the S&P 500’s rapid 22% gain in recent weeks.
Dimon warns investors may be overlooking potential negative outcomes from the tariffs, including higher inflation, a period of stagnant growth combined with inflation, and increased negative views of the US internationally.
Potential Consequences for Cryptocurrency Markets
JPMorgan’s outlook and the potential effects of tariffs could influence cryptocurrency markets in specific ways, based on past market behavior and economic mechanisms:
Inflation/Stagflation Protection: If tariffs lead to higher inflation, assets with fixed maximum supplies, like Bitcoin, could become more appealing. Historically, during inflationary periods like 2021-2022, Bitcoin’s price movement showed a strong positive link to gold prices.
Link to Technology Stocks: A renewed rise in technology stocks could potentially lift cryptocurrencies focused on artificial intelligence applications (e.g., FET, RNDR) or decentralized infrastructure (e.g., FIL, AKT), as they sometimes attract similar investment.
Cross-Border Trade Use: Increased tariffs might boost the use of stablecoins (like USDT, USDC) for international trade, mirroring past surges in peer-to-peer trading volumes seen in countries with strict currency controls, such as Argentina and Turkey.
Regulatory Shifts: If tariffs harm allied economies, regions like the European Union or Japan might speed up cryptocurrency rulemaking as a strategic response, similar to the EU’s MiCA framework implemented in 2024.
Cryptocurrencies could act as a buffer against stock market drops caused by tariffs, as Bitcoin did during US-China trade tensions. However, their recent positive connection to the S&P 500 suggests an initial stock market decline would likely pull crypto prices down too.
Observable Data
In the second quarter of 2025, the number of active Ethereum addresses increased by 12% even as the price fell. This pattern can indicate institutions accumulating assets during volatility, supporting JPMorgan’s view of markets overcoming worry.
Investors might use stablecoins as a temporary holding during periods of predicted unsettled trading. Should the stock market achieve new highs as JPMorgan forecasts, Bitcoin and cryptocurrencies linked to AI infrastructure could see the clearest benefits.
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