JPMorgan Chase Lowers S&P 500 Index Outlook Due to Oil Price Shock Escalating Economic Recession Risk
BlockBeats News, March 20th, JPMorgan Chase lowered its year-end target for the S&P 500 Index from 7500 points to 7200 points, citing increased economic recession risks due to the impact of the Iran conflict and surging oil prices.
The bank warned that the market may underestimate the impact of rising energy costs on the economy. While investors are concerned about inflation, JPMorgan Chase believes that the threat to consumer demand is greater, which could weaken economic growth. Historically, a surge in oil prices of over 30% has often led to demand contraction and is frequently a precursor to an economic recession.
In the short term, the S&P 500 Index may experience further declines, especially after breaking below the 200-day moving average — a bearish signal. If the selloff continues, the index may find support around 6000-6200 points.
Although JPMorgan Chase still expects the economy to recover later this year with the support of investments and stimulus measures, the extent of the recovery may be more limited due to ongoing geopolitical risks.
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