Equities have been on a remarkable run — join members of J.P. Morgan&#x27;s Data Assets and Alpha Group to dig into what’s been behind this outperformance. Eloise Goulder, head of the group, and product specialist Edwina Lowe break down the forces lifting markets, from resilient growth and strong earnings to the sheer scale of AI capex and rising valuations. We then hear from John Schlegel, global head of Positioning Intelligence, and Drew Tyler, global head of Market Intelligence, who explore the near-term outlook for equities — weighing inflation and rates risk, seasonality and positioning across regions. This episode was recorded on June 1 and June 9, 2026. The podcast&#x27;s views do not necessarily reflect those of J.P. Morgan Chase &amp; Co or its affiliates (together “J.P. Morgan) and are not from J.P. Morgan’s Research Department. They do not constitute recommendations or offers to buy or sell securities. Intended for institutional and professional investors, not retail use, it is for informational purposes only. Products and services mentioned may not suit all investors or be available in all jurisdictions. J.P. Morgan may make markets and trade in discussed securities and asset classes. Visit www.jpmorgan.com/disclosures/salesandtradingdisclaimer for more disclaimers and regulatory disclosures. External speakers&#x27; opinions are personal and not J.P. Morgan&#x27;s views. © 2026 JPMorgan Chase &amp; Company. All rights reserved.

Equities update at mid-year: What drove the recent rally and what’s next?

Making Sense

# Full Transcript

**Podcast:** Making Sense

## Participants

- **Edwina Lowe** (J.P. Morgan)
- **Eloise Goulder** (J.P. Morgan)

## Transcript

Hi, and welcome to J.P. Morgan's Making Sense. I'm Edwina Lowe from our Data Assets and Alpha group. And today I'm delighted to be sitting down with Eloise Goulder for this two-part episode discussing initially the long-term strength that we've seen in markets of late. We'll then hand over to John Schlegel and Drew Tyler to discuss nearer-term dynamics and implications from here.

So Eloise, we've seen a particularly strong run in markets over the last three years or so with the S&P delivering over 20% in both 2023 and again in 2024 and over 15% last year in 2025. And we've had a particularly strong start to the first five months or so of this year. Could you give a bit of context to what we've seen and what you consider the key drivers to have been behind this outperformance?

Yes, absolutely, Edwina. And as you say, it has been a very unusually and consistently positive period for global equities and U.S. equities in particular. So in terms of your questions on the drivers, well, I would summarise it as the macro, the micro, and then just the sheer strength of the tech and the AI industry.

So on the macro front, despite an aggressive rate hiking cycle through 2022 and 2023, and that was really to tackle inflation post the Russia-Ukraine conflict, and also in spite of the Liberation Day tariffs that we saw start last year, real GDP growth in the U.S. has just continued to be very resilient.

We've seen over 2% real GDP growth in each year since 2023. So that has been providing core support on the macro front. If we then turn to the micro front, the micro economy, the bottom-up earnings for U.S. corporates has also been incredibly strong. We actually see earnings for the S&P 500 having roughly doubled since 2019. So a large chunk of equity market gains have been driven by real underlying earnings growth.

Now, where have those earnings come from? For a long period of time, they were predominantly coming from tech and the MAG7. In 2024, about half of earnings growth was delivered from the MAG7. But it was only really in the last year or so that we've seen the rest of the S&P 500 begin to catch up with strong earnings growth as well. And that takes me to my third point, another very significant driver of equity market strength in recent years, and that's been AI and AI capex.

Now, if we look at what the MAG7 have reported at Q1 earnings, they are expecting to spend about $700 billion on capex this year, the majority of that capex being spent on AI-related infrastructure. At $700 billion, that represents more than 2% of U.S. GDP. And that is not a static 2%. That 2% has been created over the last few years. That comparable AI capex spend number was only around $100 billion back in 2021.

So AI capex is absolutely contributing towards meaningful GDP growth. We're now at the stage where you can't have a vi...

Equities update at mid-year: What drove the recent rally and what’s next?

Transcript

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Equities update at mid-year: What drove the recent rally and what’s next?

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.