Deutsche Bank Raises S&P 500 Forecast on Easing Tariff Impact, Economic Resilience
Deutsche Bank has increased its year-end target for the S&P 500 to 6,550 from 6,150, citing signs that the adverse effects of trade tariffs on corporate earnings are fading and that the U.S. economy remains robust.
The German bank joins a growing list of major financial institutions, including UBS Global Wealth Management, Goldman Sachs, and RBC Capital Markets, that have recently boosted their projections for the key U.S. stock index. Alongside the index upgrade, Deutsche Bank also raised its earnings per share (EPS) forecast for the S&P 500 to $267, up from $240.
In a note to clients, Deutsche Bank strategists led by Binky Chadha said the estimated drag from tariffs is now only about one-third of what was previously expected. Nevertheless, they cautioned that the market may still face volatility, with potential “sharp pullbacks” if trade tensions flare up again in the coming months.
The S&P 500 edged up 0.4% on Monday, closing at 5,935.94. Other major U.S. indexes also ended in positive territory, though investor sentiment remained cautious amid concerns about renewed friction between the U.S. and China. President Donald Trump recently accused Beijing of violating a temporary trade agreement involving critical minerals—a claim denied by Chinese officials.
Amid the uncertainty, the U.S. dollar weakened slightly, Treasury yields rose modestly, and gold prices climbed to a three-week high, reflecting increased demand for safe-haven assets.
U.S. Treasury Secretary Scott Bessent said over the weekend that Trump was expected to speak with Chinese President Xi Jinping soon in an effort to resolve the dispute.
Analysts at Vital Knowledge noted that markets are watching closely to see whether Trump adopts a tougher trade stance or continues a pattern of retreating from aggressive tariff threats. Meanwhile, Reuters reported that the Trump administration has asked trade partners to submit their best offers for ongoing negotiations by Wednesday.
