To The Moon

Citigroup indeed raised its year-end S&P 500 target to 6,600, up from 6,300, signaling continued optimism in the equity markets. This marks its second upward revision in just two months .

What Is Driving This Bullish Outlook?

Corporate Tax & Spending Legislation: The U.S. tax and spending bill enacted on July 4, 2025, is expected to lower the corporate tax burden and enhance employee benefit access—factors that Citi believes will underpin improved forward earnings .

Resilient Earnings Momentum: Over 81% of S&P 500 companies have exceeded earnings expectations, driven by robust results from the tech-heavy "Magnificent Seven," which continue to anchor market performance .

Rebound from Earlier Tariffs: After bottoming in April due to “Liberation Day” tariff jitters, the S&P 500 has rebounded approximately 32.2%, buoyed by renewed confidence and broadening strength across sectors .

Second-Half Bull Case: In a more aggressive scenario, Citi envisions the index climbing as high as 7,200 points .

Does “New Highs Never End” Make Sense?

Citigroup’s sentiment clearly leans toward “the parade continuing,” given its forecast of further upside—even if moderate. The 6,600 target implies a 3.2% gain from the then-current level (~6,389) .

However, important caveats remain:

While Citi is bullish, it acknowledges ongoing policy and macroeconomic risks—including tariffs, rate decisions, and geopolitical tensions—that could temper market gains .

This optimism follows a broader shift: earlier in 2025, many institutions lowered forecasts amid tariff fears—Citi had dropped its target to 5,800 before revising upward again .

---

Summary

Question Insight

Will the market's rally persist? Citi expects it to continue, underpinned by strong earnings and legislative tailwinds.

Is the 6,600 target reasonable? Yes—it's based on solid earnings beats and improving fundamentals.

Could new highs really be ahead? In Citi’s bull-case (up to 7,200), yes—but macro risks still loom.