JPMorgan has increased its year-end target for emerging market equities by 27%, stating that the reopening of the Strait of Hormuz is aiding a recovery in emerging market trading and that the technology sector will remain a primary market driver.

Strategists including Rajiv Batra wrote in a report that, while inflation concerns are expected to persist for some time, the reopening of the Strait of Hormuz paves the way for more balanced performance within emerging markets.

JPMorgan has raised its year-end 2026 target for the MSCI Emerging Markets Index from 1,575 points to 2,000 points, implying approximately 13% upside from Tuesday's closing level.

The strategists noted that a reminder is necessary, as JPMorgan does not anticipate a significant decline in oil prices this year.

JPMorgan's strategists expect that lower oil prices would benefit oil-importing nations, forecasting an average Brent crude price of $96 per barrel in 2026, which is projected to drop to $75 per barrel in 2027.

While oil-importing countries may perform well, their performance is expected to lag behind the technology sector, which is led by South Korea and Taiwan.

Within emerging markets, it is recommended to overweight the IT, energy, materials, and financial sectors.