JPMorgan is betting that artificial intelligence will remain a powerful tailwind for equities, joining a broader set of forces that could extend the market’s rally into 2026.
In a new CNBC interview, Elyse Ausenbaugh, head of investment strategy at JPMorgan Wealth Management, says momentum in US stocks has held despite a difficult 2025 backdrop.
Looking ahead, she says both the macro environment and AI infrastructure spending point to continued strength.
“We do think the momentum is going to continue. I mean, when you think about the macro backdrop, obviously, it’s been a challenging 2025. But as we look ahead to 2026, there are reasons to expect improvement on that front. And with these powerful tailwinds related to things like AI investment, we are believers that the rally has more upside ahead.”
She emphasizes that Fed monetary policy will remain a major factor.
“We can’t discount the value of the Fed rate-cutting cycle. We’ve been implementing our so-called Fed rate-cutting playbook, and we expect that to play out absent a recession going forward.”
Beyond policy, Ausenbaugh points to corporate performance. She says profit margins remain near the highest levels of the current cycle, even as companies pour billions of dollars into upgrading digital infrastructure for AI.
“When you look at things like corporate profit margins still around the highest levels that they’ve been throughout this cycle, when you think about all of the investment that’s being funneled into infrastructure supporting artificial intelligence and the way that that’s filtering through sectors, and when you look through and kind of think about all of the uncertainty that’s finally starting to dissipate as it relates to things like tariff policy, we think that there is a path ahead to kind of keep valuations supported, but also continue to fuel earnings growth.”
As of Tuesday’s close, the S&P 500 is trading at 6,688.
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