JPMorgan Chase, Citi Say One Asset Will Outperform S&P 500 as EY Warns Traders Have ‘Unwarranted Optimism’ in US Stocks: Report

Banking giants JPMorgan Chase and Citi imagine that one international inventory market index will outshine the S&P 500 (SPX) this 12 months as traders search alternate options to US belongings.

In a brand new Bloomberg survey involving 20 market strategists, each JPMorgan and Citi predict that the Stoxx Europe 600 Index (SXXP) will outperform the S&P 500 for the rest of 2025, pushed by an bettering financial outlook within the EU.

Among the many polled analysts, JPMorgan has the very best goal for SXXP, predicting that the Stoxx Europe 600 Index will soar to a excessive of 580 factors within the coming months. On the identical time, the financial institution forecasts a decline for the S&P 500.

In the meantime, Citi expects SXXP to surge to 570 factors this 12 months because the market will get extra readability on company earnings.

Says Citigroup strategist Beata Manthey,

“If we have now already moved previous peak earnings uncertainty, this might set the stage for added upside and potential a number of re-rating, particularly amongst extra beaten-up cyclical sectors.”

The SXXP is a inventory market index that tracks the efficiency of the 600 largest publicly traded corporations throughout 17 European nations. As of Friday’s shut, the Stoxx Europe 600 Index is buying and selling at 545 factors, up about 7.60% year-to-date.

The banks’ outlook comes as Massive 4 accounting agency Ernst & Younger (EY) warns that the S&P 500 is rallying with out pricing within the potential damaging impacts of tariffs, reports Yahoo! Finance.

In an investor notice, EY chief economist Gregory Daco says that tariffs will seemingly strain family demand by driving costs up. He additionally expects the US economic system to lose momentum and strategy “stall velocity” within the fourth quarter of 2025, forecasting a year-over-year GDP development of simply 0.6%.

“Fairness markets have reacted with unwarranted optimism, overlooking the persistent financial drag posed by elevated tariffs.”

As of Friday’s shut, the S&P 500 is buying and selling at 5,802 factors.

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