The Capital Economics consultancy projects the S&P 500 to reach 7,000 points by 2025. They believe that the performance of technology companies involved in the development of AI should boost the S&P 500 index by another 27% before peaking next year, followed by the bursting of the bubble.
The problem is that if this actually happens, it will have negative legal repercussions for the economy. A report by a branch of the J.P. Morgan bank, the J.P. Morgan Chase Institute, points out that Americans have never earned so much money. This increase in wealth is the result of aggressive investment in the stock market since the beginning of the pandemic, in March 2020. According to the report released on October 1, the financial wealth of American families increased in the last four years by 38%, to US$120 trillion. The gains obtained from the income from stocks in the period, US$45.6 trillion, represent an amount that exceeds the US$35 trillion that Americans have in real estate assets. About 58% of U.S. households hold stocks, according to a 2022 survey by the Fed. That percentage includes households that own stocks directly and those that own them indirectly, through trusts, retirement accounts or other managed accounts.