Two Big Banks Just Raised Their S&P 500 Targets. Here’s Why.

Thu, Sep 11, 2025, 12:16 PM 3 min read

• Strong earnings, pending interest rate cuts and the AI boom could mean stocks keep rising in the next year, according to two big Wall Street Banks.

• Deutsche Bank raised its year-end target for the S&P 500 to 7,000 from 6,550 on Wednesday, while Barclays lifted its 2025 target to 6,450 from 6050 and its 2026 target to 7,000.

• Their bullish views came as the benchmark index closed at a record high Wednesday.

Strong earnings, interest rate cuts and a resilient AI boom could mean stocks keep rising in the next year, according to two big Wall Street Banks.

Deutsche Bank on Wednesday raised its year-end target for the S&P 500 (SPX) to 7,000 from 6,550 as analysts led by Binky Chadha boosted their 2025 earnings per share estimate for companies in the benchmark index.

That level would be 7% above the index's record close Wednesday, which it reached with the help of continued euphoria around the AI trade, powered by Oracle's (ORCL) blowout guidance, and increasing expectations of interest-rate cuts by the Federal Reserve. (Stocks continued to rise Thursday.)

Companies aren't suffering the pain from President Donald Trump's tariffs that many investors and economists predicted, Deutsche Bank wrote. “Companies see the hit from tariffs so far as modest and likely to remain manageable,” the analysts wrote.

They said that stock valuations will continue to stay high as companies maintain high payout ratios and earnings stay resilient. Deutsche analysts are projecting earnings growth of more than 9.5% this year and almost 14% next year, above the average it cited for typical non-recession years.

The Trump administration, meanwhile, could reverse painful measures around trade or immigration policies if those hammer markets, according to Deutsche Bank.

"If the perceived risks to growth or inflation rise and Presidential job approval ratings fall as they did post Liberation Day, we expect relents on policies," they wrote.

The Deutsche analysts said they continue to like large growth stocks and tech shares, as well as financial shares, but remain underweight in "defensive bond-like sectors" like consumer staples, utilities, real estate, healthcare and restaurants.

Deutsche Bank wasn’t the only Wall Street player that upped its target for the S&P 500 this week. Barclays raised it year-end target to 6,450 from 6,050. While that was below Wednesday's close, Barclays also increased its 2026 price target for the S&P 500 to 7,000 from 6,700.