Citi Is the Latest Bank to Get More Bullish on the S&P 500

Does the S&P 500 have more to run this year? Analysts at Citi say it does, marking the latest bank to get more optimistic about the outlook for U.S. stocks. 

The bank’s analysts late Friday lifted their year-end target for the benchmark index to 6,300, implying about a 5% premium to last week’s close just above 6,000. They cited “renewed confidence in the AI-related opportunity” and “improved earnings growth expectations” headed into next year. 

“No doubt, policy volatility is likely to persist as are numerous other risks,” Citi wrote, pointing toward a list of issues—including tariffs, taxes, the budget, interest rates and geopolitics—it sees as likely to remain on investors’ minds. “This keeps us reticent to chase rallies but more inclined to buy pullbacks. What the first half has told us is that fundamental volatility may be more manageable.”

Several banks have recently boosted their own targets after cutting them in the wake of President Donald Trump’s “Liberation Day” tariff announcements that shook markets. Deutsche Bank last week lifted its target to 6,550, while the target at Barclays is now 6,050. The latest target at UBS matches Citi’s. 

While the outlook for U.S. trade policy remains in flux—American and Chinese officials were set to meet for talks today—Citi believes investors’ reactions may be more moderate than seen earlier this year.

“Tariff shock has dissipated, yet more volatility on this should be expected,” they wrote. “In our view, the administration is not willing to weather the market angst and constituent pushback from a more severe tariff path. There will likely be posturing for threats of higher tariff rates on a country by country basis, as well as additional sectoral tariffs put in place, but we do not think this will produce the same shock/surprise that set off the April drawdown.”

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