Deutsche Bank has raised its year-end target for the S&P 500 (.SPX) to 6,550 from 6,150, citing lower tariff-related earnings drag and a resilient economy, in a move that comes amid a broader wave of target upgrades by major Wall Street brokerages.
This follows similar moves by Goldman Sachs and UBS Global Wealth Management, which raised their forecasts in May, with RBC Capital Markets joining the trend on Monday.
"We now see the tariff drag at only about one-third of what we previously penciled in," Deutsche Bank strategists led by Binky Chadha wrote in a note on Monday.
The new target is 10.35% above the S&P 500 index's last close of 5,935.94.
The S&P 500 posted its strongest monthly gain since November 2023 in May, boosted by U.S. President Donald Trump's softer stance on tariffs, strong corporate earnings, and tame inflation data that helped markets recover from April's decline.
Still, the European brokerage warned that the rally could be volatile, with potential pullbacks driven by renewed trade tensions.
"We expect the rally to be punctuated by sharp pullbacks on repeated cycles of escalation and de-escalation on trade policy", the brokerage said.
Deutsche also increased the estimate for the index's earnings per share to $267 from $240.
