Citigroup: Raises Year-End Target for S&P 500 Index, Expects Tax Cut Measures to Offset Tariff Headwinds

On August 11th, the strategist of Citigroup raised the target for the S&P 500 index and claimed that tax cuts should offset the negative influence of tariffs on U.S. companies. The team led by Scott Chronert increased the year-end target for the index from 6300 points to 6600 points, suggesting a roughly 3% growth compared to the close of last Friday. This quarter's earnings reports were stronger than expected, with little indication of the impact of tariffs on performance, which has driven the stock market to new highs this month. Institutional data shows that more than 81% of S&P 500 index component companies have exceeded expectations, which is the highest level in seven quarters. The Citigroup team stated that companies not only performed well but also mostly maintained their expectations for the second half of the year. Therefore, market consensus earnings per share expectations are being elevated. They have raised the earnings per share forecast for S&P 500 index component companies in 2025 from the previous $261 to $272 and in 2026 from $295 to $308. They said that higher profit forecasts would not have a significant impact on valuation assumptions. They expect that by mid-2026, the index will rise to 6900 points, approximately an 8% increase from the current level. (Jinse Finance)