By Reuters

The J.P. Morgan investment bank at the International Financial Services Centre (IFSC) in Dublin, Ireland, January 17, 2026. REUTERS/Clodagh Kilcoyne

(Reuters) - J.P. Morgan on Tuesday raised its year-end target for the S&P 500 index (.SPX) to 7,600, citing AI and tech-driven ​earnings, just weeks after lowering its forecast, with a ceasefire ‌between the U.S. and Iran aiding sentiment.

The revised target implies an upside of about 6.9% from Monday's close of 7,109.14. The Wall Street brokerage had cut its target to 7,200 from ​7,500 last month.

J.P. Morgan also hiked its annual earnings-per-share forecast for the ​index to $330 from $315. For 2027, it increased its EPS target to $385 from $355.

U.S. ⁠equities have rebounded from their March lows following a ceasefire in the Middle East war.

"Given the ​sharp rally from recent lows and a geopolitical backdrop that, while significantly ​de-escalated, remains in flux, there is a meaningful risk that the market enters a short-term consolidation phase before resuming its upward trajectory," J.P. Morgan said in a note.

However, the brokerage expects ​the index to hit nearly 8,000 by year-end if there is a quick ​resolution to the conflict.

A strong momentum in AI and tech stocks helped the S&P ‌500 and ⁠Nasdaq (.IXIC) touch record highs last week alongside expectations of robust first-quarter earnings.

"The emergence of Anthropic's Mythos has helped reignite the bullish AI trade after a shaky start to the year," J.P. Morgan said.

Anthropic unveiled its AI model 'Claude Mythos' earlier ​this month, but ​halted its release ⁠over concerns that it could expose hidden cybersecurity vulnerabilities.

The brokerage said there is still room for further upside in consensus earnings ​estimates, noting recent positive revisions have been concentrated in ​a small ⁠group of technology firms and the energy sector.

"We expect the US to remain a core long-term holding in global portfolios due to its breakthrough innovation, overall superior ⁠growth, ​and capital returns, even though the diversification ​theme and repatriation flows out of the US are likely to persist in the background," it added.

Reporting ​by Kanishka Ajmera in Bengaluru; Editing by Mrigank Dhaniwala and Sonia Cheema

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