Dimon warns stock rally may be masking longer-term economic risks

JPMorgan Chase CEO Jamie Dimon said he is surprised by the stock market’s strength despite a long list of geopolitical and economic risks. His warning matters because one of Wall Street’s most closely watched bankers says the forces now building could shape the economy over the next several years.

Dimon made the comments during a discussion hosted by the Council on Foreign Relations, according to Fortune. He pointed to Ukraine, Iran, oil, Russia and the U.S. relationship with China as risks that markets appear to be treating as distant from the immediate economy.

Markets keep rising through global strains

Fortune reported that stocks have continued to climb even after years marked by the pandemic, Russia’s war in Ukraine, persistent inflation in major economies, U.S.-China tensions and a recent Middle East conflict. The S&P 500 has risen nearly 80% over the past five years, while the Nasdaq has gained more than 86%, according to Fortune.

Wall Street has also stayed optimistic through an oil supply shock that Fortune said has lasted more than three months. The enthusiasm has been helped in part by expectations around artificial intelligence, Fortune reported.

Dimon said that market calm has left him cautious. “I am surprised because I think that you have Ukraine, Iran, oil, Russia, and our relationship with China,” he said at the Council on Foreign Relations event, according to Fortune. “That stuff is really important for the free world, but it’s not necessarily the economy today.”

Dimon says timing is the hard part

Dimon said investors and analysts may be focused on near-term economic data, while he is watching longer-running shifts that could affect the economy later, according to Fortune. He described those forces as “tectonic plates” and said he is worried about how they may play out.

“They may determine the economy, but it may be a year from now, a few years from now, or maybe it will all be reserved somehow,” Dimon said, according to Fortune. “But I’m quite concerned about it, so put me in the more cautious category about how that plays out.”

Fortune noted that Dimon has often taken a more skeptical stance than many on Wall Street. In 2024, the JPMorgan chairman wrote that he runs the bank with the “OODA loop” in mind, a military decision-making framework that stands for observe, orient, decide and act, according to Fortune.

AI spending and steady growth support the bulls

Dimon also acknowledged reasons investors remain confident, Fortune reported. He cited artificial intelligence capital spending, which Fortune said is running at about $700 billion this year and is expected to continue.

Other supports include unemployment at 4.3% and gross domestic product growing at about 2%, according to Fortune and the Bureau of Economic Analysis. Fortune also reported that consumers received a boost from the One Big Beautiful Bill Act, though research cited by Fortune suggests much of that benefit has been offset by higher fuel prices tied to the Middle East conflict.

Dimon said those factors are not necessarily negative at the moment, but he warned that conditions can change over the next year or two, according to Fortune. “We’re in a bull market,” he said. “It’s like a little tsunami. When that kind of thing happens, it’s very hard to stop.”

This story draws on original reporting from Fortune.