Deutsche Bank AG strategists led by Bankim Chadha lowered their year-end target for the S&P 500 index by 12% from 7,000 to 6,150. This marks a shift from their previously steadily optimistic outlook on the index's potential to one that is in line with current realities. The German bank's new target is a near peak of the index witnessed in February 2025.
Chadha's team also forecast a 5% decline in earnings for companies in the S&P 500 for this year, down from their previous forecast of 8% growth. Their 2025 earnings per share estimate for the S&P 500 has fallen from $282 to $240.
The strategists believe the recently revised US tariff measures will raise the effective interest rate on imports from 2.3% to 26.4%, which would mean an $800 billion tax increase. That is comparable to total US federal corporate tax revenues of about $500 billion in 2024.
Strategists at the Deutsche Bank expect the S&P 500 to trade in a broad range of 4,600–5,600. In their opinion, the stock market is prone to growth if positive news arrives.