Two Big Banks Just Raised Their S&P 500 Targets. Here’s Why.

Group 1 - Deutsche Bank raised its year-end target for the S&P 500 to 7,000 from 6,550, reflecting an optimistic outlook on earnings growth and interest rate cuts [2][6] - Barclays also increased its year-end target for the S&P 500 to 6,450 from 6,050 and raised its 2026 target to 7,000 from 6,700 [6][7] - Analysts project earnings growth of more than 9.5% this year and almost 14% next year, indicating strong corporate performance [4] Group 2 - The S&P 500 index reached a record high, driven by enthusiasm around AI and expectations of interest rate cuts by the Federal Reserve [3][6] - Companies are managing the impact of tariffs better than anticipated, with Deutsche Bank noting that the effects are seen as modest and manageable [3][4] - Analysts favor large growth stocks, tech shares, and financial shares while remaining underweight in defensive sectors like consumer staples and utilities [5]