Citigroup: Raising the year-end target tax reduction measures for the S&P 500 index is expected to offset the negative impact of tariffs

According to a report by Golden Finance, Citigroup's strategist has raised the target for the S&P 500 index and stated that tax cuts should be able to offset the negative impact of tariffs on American businesses. The team led by Scott Chronort has raised the year-end target for the index from 6300 points to 6600 points, implying that the index will rise about 3% from last Friday's close. This quarter's financial report performed better than expected, and there was almost no negative impact of tariffs on performance, driving the stock market to reach new highs this month. According to institutional data, over 81% of companies in the S&P 500 index have exceeded expectations in terms of performance, the highest level in seven quarters. The Citigroup team stated that not only have companies performed exceptionally well, but most of them have maintained their expectations for the second half of the year. Therefore, the market's consensus expectation for earnings per share is being raised. They have raised their earnings per share expectations for companies in the S&P 500 index for 2025 from $261 to $272, and for 2026 from $295 to $308. They stated that higher profit forecasts will not have a significant impact on valuation assumptions. They expect that by mid-2026, the index will rise to 6900 points, an increase of about 8% from the current level.