Citigroup strategists have raised the target for the S&P 500 index, saying that tax cuts should offset the negative impact of tariffs on American companies. The team led by Scott Chronert raised the year-end target for the index from 6300 points to 6600 points, implying a rise of about 3% from last Friday's closing. Strong quarterly financial performance exceeded expectations, with almost no negative impact from tariffs on earnings, driving the stock market to new highs this month. Institutional data shows that over 81% of S&P 500 index component companies have exceeded expectations, the highest level in seven quarters. The Citigroup team stated that companies are not only "performing well," but also mostly maintaining expectations for the second half of the year. Therefore, consensus expectations for earnings per share are being raised in the market. They have raised the earnings per share forecast for S&P 500 index component companies in 2025 from the previous $261 to $272, and in 2026 from $295 to $308. They stated that higher profit forecasts will not have a significant impact on valuation assumptions. They expect the index to rise to 6900 points by mid-2026, an increase of about 8% from current levels.