Jefferies raises S&P 500 annual target to 6,600 on resilient earnings

Jefferies raised its year-end target for the S&P 500 index to 6,600, citing robust second-quarter corporate earnings, easing concerns about the health of the U.S. economy.

Previously, the brokerage’s target was 5,600, and was the sole firm projecting the benchmark index below the 6,000 mark.

UBS, Citigroup, and HSBC were among the leading brokerages that boosted their index targets earlier this month amid improving market sentiment.

AI-related companies and the “Magnificent Seven” led the market gains, while notable strength in financials suggests a resilient macroeconomic backdrop, Jefferies analyst Desh Peramunetilleke wrote in a note on Sunday.

Following a sharp downturn in April amid President Donald Trump’s “Liberation Day” tariff announcement, U.S. equities have regained ground driven by resilient earnings.

Of the 474 S&P 500 companies that have reported second-quarter results until Friday, 80 per cent beat analysts’ earnings estimates, according to data compiled by LSEG, above the prior four‑quarter average of 76.4 per cent. Historically, 67 per cent of companies on average have reported better-than-expected results in a typical quarter.

Jefferies also forecast S&P 500 earnings per share will climb nearly 10 per cent this year to US$267, underscoring expectations for solid profit growth.

Meanwhile, the brokerage also reaffirmed its forecast for three more interest rate cuts by the U.S. Federal Reserve this year, beginning September, citing Chair Jerome Powell’s more cautious tone at Jackson Hole on Friday.

While brokerage optimism has climbed alongside resilient earnings, companies across sectors continue to flag tariffs as a headwind to volumes and margins, even if the bite appears smaller than the previous quarter as pricing actions, supplier shifts and cost controls take hold.

As the gap widens between bullish targets from brokerages and cautious signals from companies still managing tariff friction, the market’s trajectory may hinge on how durable those mitigations prove if trade pressures persist.

(Reporting by Joel Jose in Bengaluru; Editing by Rashmi Aich and Krishna Chandra Eluri)