[JPMorgan: Global Central Banks Resume Rate Hikes, Stock Market Still Supported by Corporate Earnings]
JPMorgan's research report on September 18, 2026, pointed out that the Federal Reserve raised interest rates by 25 basis points to 3.75-4.00%, with the Bank of Japan simultaneously hiking rates, signaling a shift toward synchronized tightening by global central banks. The dot plot indicates one more rate hike this year, with eight committee members expecting another hike next year. JPMorgan predicts a 25-basis-point hike in December and has raised its target for 2-year and 10-year U.S. Treasury yields to 4.70% and 5.05%, respectively. JPMorgan believes that as long as the rate hike cycle remains shallow, the stock market will continue to be supported by corporate earnings and can withstand a 10-year yield approaching 6%. Large-cap stocks, technology, and communication services are expected to outperform during the rate hike cycle. The firm recommends overweighting equities and emerging markets and believes Brent crude is unlikely to sustain levels above $100 per barrel.
AI Interpretation: The Federal Reserve's latest rate hike underscores the continuation of monetary policy tightening, directly elevating market expectations for peak interest rates. The hawkish signals from the dot plot have completely shattered hopes for a near-term pivot to easing, forcing the U.S. Treasury yield curve to shift further upward. This high-interest-rate environment is reshaping asset pricing logic, driving capital toward high-quality sectors with resilient earnings. The synchronized tightening by global central banks has intensified liquidity pressures, pushing the market into a phase of stock selection driven by earnings rather than valuation expansion.
