Something Big Is Brewing In Gold, Stocks, And The Dollar: JPMorgan's Half-Year 2025 Outlook

Even as U.S. stocks trade at all-time highs, JPMorgan's new mid-year outlook suggests a quiet storm may be forming under the surface—one that could see gold soar, the dollar weaken, and markets reset in the second half of 2025.

S&P 500 May Cool Off—But Not Crash

In a report shared Tuesday, the investment bank forecasted the S&P 500 — as tracked by the Vanguard S&P 500 ETF VOO — to finish the year at 6,000, implying a modest 3.5% pullback from current levels around 6,220.

That would still mark a positive year overall, underpinned by a 12% increase in earnings, with further growth expected in 2026.

"The economy and consumers have shown resilience, and corporates delivered healthy pre-Liberation Day growth of 12% despite the implied aggregate tariff rate surpassing 20%," said Dubravko Lakos-Bujas, head of Global Markets Strategy at JP Morgan.

Yet there are reasons for caution. "We remain open to the economy slowing in the second half of this year at a time when valuation is less supportive," he said, noting that the market may repeat the pattern seen in 2023–2024: narrow leadership and high concentration.

US Growth Outlook Trimmed, Inflation Risks Rising

Inflation is expected to heat up again during the summer months. This could push the Fed's next rate cut to December, according to JPMorgan economists.

"We anticipate this [tariff] shock to generate a broad-based downshift in global growth and a rotation in inflation pressures toward the U.S.," said Bruce Kasman, chief economist.

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Gold Rally Not Over—Could Hit $4,000 By 2026

Gold's bullish trend is far from over, with JPMorgan forecasting the metal to average $3,675 per ounce in the fourth quarter of 2025 and potentially exceed $4,000 by the second half of 2026.

"For investors, we think gold remains one of the most optimal hedges for the unique combination of stagflation, recession, debasement and U.S. policy risks," said Natasha Kaneva, head of Global Commodities Strategy.

If JPMorgan’s gold forecast plays out, the SPDR Gold Trust GLD could climb another 10% by year-end and gain up to 20% more through mid-2026, tracking bullion's surge toward $4,000.

Meanwhile, oil prices are likely to stay subdued due to a growing supply surplus. Kaneva said JPMorgan sees Brent crude trading in the low-to-mid $60s per barrel through the end of the year, barring a severe Middle East escalation.

A Weaker Dollar Supports EM Currencies

JPMorgan remains bearish on the U.S. dollar amid shifting global dynamics. "The main anchors of our bearish USD view remain unchanged," said Meera Chandan, co-head of Global FX Strategy.

Chandan pointed to fading U.S. growth exceptionalism, expensive valuations, and a buildup of liabilities relative to the rest of the world.

"Several key conditions seem to define the onset of a USD bear cycle… Plus, past experience indicates that once initiated, dollar bear cycles can persist for a while," she said.

This environment supports emerging market currencies, which are expected to outperform in the second half.

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