Citigroup raises S&P 500 index target as corporate earnings exceed expectations, offsetting tariff impacts.

On August 11, Citigroup strategists raised their target for the S&P 500 index, stating that tax cuts should offset the negative impact of tariffs on U.S. companies. The Citigroup team raised the year-end target for the index from 6,300 points to 6,600 points, implying that the index will rise about 3% from last Friday's close. This quarter's earnings reports have exceeded expectations, and there is almost no visible negative impact from tariffs on performance, driving the stock market to new highs this month. According to data platforms, over 81% of S&P 500 component companies reported better-than-expected earnings, the highest level in seven quarters. The Citigroup team stated that companies are not only "performing excellently" but most also maintain their performance expectations for the second half of the year. Therefore, market consensus expectations for earnings per share are being revised upward. They raised the earnings per share forecast for S&P 500 component companies for 2025 from the previous $261 to $272, and the forecast for 2026 from $295 to $308. They noted that higher profit forecasts will not have a significant impact on valuation assumptions. They expect the index to rise to 6,900 points by mid-2026, an increase of about 8% from current levels.