JPMorgan Sees Stocks Powering Through Any Short, Sharp Pullbacks
US stocks have further to run as corporate earnings growth underpins sentiment despite some signals suggesting equities may have risen too far, JPMorgan Asset Management’s Jack Caffrey said.
Even with the economy several years into an expansion, profits are on track for growth of 22% or more in 2026, according to Caffrey, a portfolio manager at the asset management unit of JPMorgan Chase & Co. Last year saw a rise in the mid-teens, and the same is likely in 2027, Caffrey said Tuesday on Bloomberg Television’s Surveillance.
“This is really an earnings-driven story,” he said. “I am still constructive on this equity market.”
The 2026 US stock rally, fueled partly by corporate spending on infrastructure related to artificial intelligence, hit a wall on Friday after a solid jobs report added to bets the Federal Reserve’s next interest-rate move will be a hike. But equities have rebounded this week as a recovery in the AI trade carried into a second day.
Nasdaq 100 futures advanced Tuesday, along with contracts on the S&P 500 Index and Dow Jones Industrial Average.
Caffrey’s bullishness contrasts with warnings from others on Wall Street. Bank of America Securities said Friday in a note there are “too many red flags,” advising it was time to “take profits.” Citigroup Inc. strategists wrote that traders are aggressively building short-selling positions in US stocks, with Friday’s near-5% selloff in the Nasdaq 100 Index — the sharpest in 14 months — only partially resetting exposure among investors.
Caffrey said he doesn’t expect short-term declines to upend the profit narrative.
“If you ask me what’s going to happen in the next 15 minutes, I have no particular insights,” he said. “If you ask me what happens over 15 to 24 months, I’m going to come back to the interplay between earnings and expectations.”
He acknowledged that market sentiment may have been a little high, but that indicators such as the VIX and credit spreads are “certainly telling you not a lot to be worried about here.
“If we continue seeing positive earnings revisions, there are still legs to this story,” Caffrey said, adding there will “inevitably” be bounces and setbacks along the way, creating situations “where the pullbacks will be short but they will be sharp.”
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