Banking giant Barclays has raised its 2025 year-end target for the S&P 500 to 6,450 from 6,050, marking its second upward revision in three months.

The new target implies a 1.5% drop from the index’s current value of 6,547.

Notably, Barclays’ strategists cited stronger-than-expected corporate earnings, resilient U.S. economic growth, and investor optimism around artificial intelligence as the main drivers of the outlook.

The index, which had dipped in April after President Donald Trump’s “Liberation Day” tariffs, has since staged a rebound, rallying about 30% on the back of robust earnings and enthusiasm over AI-driven growth.

Barclays noted that while corporate profits remain solid and global GDP growth is stabilizing, risks associated with the U.S. labor market still persist.

At the same time, the bank expects three Fed rate cuts this year to help ease labor market strains. It also raised its 2025 S&P 500 EPS forecast to $268 from $262 and lifted its 2026 target to 7,000, projecting EPS of $295 versus $285 previously.

Sector-wise, Barclays turned “positive” on U.S. technology, citing strong data center demand and easing AI concerns, upgraded materials to “neutral” on improving metals and chemicals outlook, and cut healthcare to “neutral” amid regulatory pressures.

Analysts turn bullish on S&P 500

Indeed, Barclays joins other banking titans in revising targets upward. In early August, HSBC boosted its year-end forecast to 6,400 from 5,600, citing momentum in technology stocks and reduced uncertainty around U.S. tariffs. HSBC also sees potential for the index to reach as high as 7,000 in a bull-case scenario, though it warned slower U.S. growth could open the door to Fed rate cuts later this year.

Similarly, Citigroup lifted its target to 6,600 from 6,300, its second upward revision in two months, pointing to resilient corporate earnings and fading tariff concerns. The bank highlighted recent corporate tax relief from President Trump’s spending bill as another boost to profits, while strong results from Big Tech continue to anchor market gains.

Both upgrades follow similar moves from Goldman Sachs, BofA Global Research, and UBS.

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