So far in 2025, the U.S. stock market has marched forward with considerable aplomb.
Case in point: after racking up multiple highs, the S&P 500 is up nearly 17% year-to-date, and multiple sectors have been registering new peaks.
AI and Big Tech have ruled the roost again, with the top five stocks now accounting for roughly 30% of the index.
However, it isn’t just tech anymore, with financials, energy, and industrials all showing pockets of strength, highlighting sector rotation.
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On the flipside, earnings revisions are turning more nuanced, and sales beats no longer guarantee bottom-line expansion. As inflation inputs sharpen up, forward guidance is becoming a lot more guarded.
Into that landscape, Jamie Dimon just issued a terse remark, which is the kind that shifts sentiment while forcing a deeper reading of market undercurrents.
Jamie Dimon calls it a bull market, not a bubble
Jamie Dimon didn’t mince words in a sit-down interview with Bloomberg about where the stock market currently stands,
“We’re in a bull market. It’s been clear.”
The JPMorgan CEO called the three-year run unmistakable, while warning that asset prices currently sit high and credit spreads are unusually tight, a rough combination that signals overconfidence.
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Dimon linked the rally’s persistence to a relatively strong consumer and job market, both cushioning corporate profits. Yet, he sounded the alarm that the same forces that are fueling optimism at this point could turn if inflation surprises again.
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“I’m a little more nervous about inflation not coming down like people expect,” he admitted, flagging heavy government spending as a risk that’s being overlooked at this point.
Also, Dimon argued that the market’s assumption of 100 basis points of Fed cuts in the following year may prove unrealistic if price pressures resurface, while adding that both Wall Street and the Fed have “almost always been wrong” in their predictions.
Additionally, he doesn’t expect an immediate downturn but conceded a 2026 recession “could happen.”
Still, he reiterated that JPMorgan will be able to navigate it smoothly and continue supporting its clientele. Also, he brushed off the current government shutdown as “a bad idea,” yet he feels it’s unlikely to dent market performance.
He shifted gears to AI, revealing JPMorgan has 2,000 people working on it, and spends a whopping $2 billion annually, and has helped deliver $2 billion in savings.
Its internal LLMs and “agentic AI” tools are being utilized by 150,000 employees weekly, as it reshapes risk, compliance, customer service, and back-office work.
S&P 500 still climbing, but the slope’s getting steeper
The S&P 500 has been on quite a run this year, and is hovering around a record-high 6,748 (at the time of writing, October 8), following a powerful three-year rally led by AI and megacap strength.
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The top five names alone command roughly 30% of the index, with Nvidia (NVDA) alone at 7.5%. In fact, Nvidia and Microsoft alone account for 50% of the gains this year.
Such a level of concentration hasn’t been seen in 50 years, which, despite amplifying upside on leadership outperformance, also magnifies downside risk if those names falter.
Some of the expectations for year-end and 2026 from Wall Street’s finest include:
- Goldman Sachs (David Kostin): Year-end 2025 target is at 6,800, on the back of dovish Fed policy and resilient earnings.
- JPMorgan (Dubravko Lakos-Bujas): Robust productivity underpins a 7,000 projection by early 2026, led by AI and capex gains.
- Evercore ISI (Julian Emanuel): Sees 7,750 as the base case for 2026, and a 9,000 bubble scenario if momentum extends.
- Bank of America (Savita Subramanian): is a lot more measured, with a 12-month target of 7,200, highlighting the importance of profitability expansion compared to a valuation uplift.
The base case essentially points to a grind-higher scenario through year-end, assuming inflation eases and the Fed delivers another cut, as AI giants continue to shine.
However, selectivity is imperative, with a strong preference for names with healthier balance sheets and clear cash-flow models over speculative “story” names.
The biggest risks include stubborn inflation,an AI sentiment unwind, and potential earnings disappointments from top-weight players.
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