Deutsche Bank raises year-end outlook for S&P 500

Investing.com - Deutsche Bank has lifted its target for the S&P 500 index to 6,550 from 6,150, pointing to signs of an easing impact of tariffs on earnings and broader economic resilience.

The German lender has become the latest bank to improve its projection for the benchmark U.S. index, joining the likes of UBS Global Wealth Management and Goldman Sachs. RBC Capital Markets raised its target on Monday.

Deutsch Bank’s estimate for the S&P 500’s earnings per share was also revised up to $267 from $240.

Writing in a note to clients, Deutsche Bank (ETR:DBKGn) strategists led by Binky Chadha argued that the drag from tariffs is now about "one-third" of what they had previously penciled in. However, the brokerage flagged that the rally may still be choppy and punctuated by "sharp pullbacks", particularly if trade disagreements potentially escalate and de-escalate in the coming months.

On Monday, the S&P 500 rose by 0.4% to close at 5,935.94. The other main U.S. indices also ended higher, although risk appetite was somewhat dented by worries over renewed trade strife between the U.S. and China. U.S. President Donald Trump has accused China of breaching a detente over levies on critical minerals -- a claim that Beijing refuted.

Fueled by worries over refueled trade tensions, the U.S. dollar softened, Treasury yields -- which tend to move inversely to prices -- ticked up, and gold, traditionally considered to be a safe-haven asset, touched a three-week high.

U.S. Treasury Secretary Scott Bessent said on Sunday that Trump would speak with Chinese counterpart Xi Jinping soon as part of a bid to smooth over the spat.

Still, traders are keen to see if Trump adopts a more hawkish stance on trade in response to an emerging narrative that he ultimately backs down from his more strident tariff threats, analysts at Vital Knowledge said. The Trump administration is urging countries to provide their best offers for trade negotiations by Wednesday, according to Reuters.