JPMorgan lifts emerging markets target after U.S.-Iran deal

JPMorgan Raises Emerging Markets Target as Strait of Hormuz Reopening Reshapes Trade Outlook

JPMorgan Chase raised its year-end target for the MSCI Emerging Markets Index on Monday, citing the framework deal between the United States and Iran to reopen the Strait of Hormuz as a catalyst for a broad recovery in developing-world equities. The revision, which lifts the bank’s forecast to 2,000 from a prior target of roughly 1,575, reflects optimism that easing energy supply disruptions and a weakening dollar will fuel a second-half rally.

Hormuz Deal Unlocks Risk Appetite

The upgrade comes days after Washington and Tehran reached a framework agreement on June 15 to end hostilities and restore shipping access through the Strait of Hormuz, a chokepoint that handled roughly a quarter of the world’s seaborne oil trade before the conflict began in late February. A formal signing ceremony is expected on Friday in Switzerland.cnbc

JPMorgan had previously advised clients to short the broader market until the strait reopened, while outlining in an April scenario analysis that a ceasefire would trigger a rotation into technology and cyclical stocks, with a regional preference for emerging markets over developed ones. The bank upgraded emerging-market currencies to overweight earlier in June.investing

The MSCI EM index has surged since the deal was announced, with futures trading near 1,786 as of this week, having already gained roughly 34% in 2025 and continued to post double-digit returns into 2026. JPMorgan’s new target implies further upside of about 12% from current levels.jpmorgan

Asian Markets Seen Outperforming

Separately, Invesco global market strategist David Chao argued that Asian emerging markets are positioned to outperform U.S. equities in the second half of 2026. Chao has consistently highlighted that emerging markets tend to beat developed markets when the dollar weakens and central banks are cutting rates, and pointed to China’s AI sector as having “considerable potential for expansion” at attractive valuations.cnbc

Invesco’s 2026 outlook noted that dollar weakness should support emerging market and commodity-related assets, while China’s investments in AI and related technologies “could serve as a powerful engine for equity market performance”. Chao has also flagged China’s technology, green tech, and biotech sectors as areas where investors are under-positioned.aastocks

Risks Remain Despite Optimism

Despite the bullish shift, shipping analysts caution that full normalization of Hormuz traffic remains distant. Reuters reported that only one LNG tanker had passed through the strait as of Monday, with shippers awaiting further details on safe routes and insurance coverage. BIMCO, one of the world’s largest shipping associations, said the security situation “remains volatile” and called current statements from the U.S. and Iran “unclear”. Analysts at ICIS said returning to full pre-conflict volumes is “a 2027 prospect”.reuters