Citigroup doesn't see the stock market's parade ending anytime soon. The bank raised its year-end S & P 500 target to 6,600 from 6,300. That implies upside of 3.3% from Friday's close. Driving the improved forecast are expected benefits from the tax bill signed in July, strong quarterly profits and an improved tariff outlook. "At the post Liberation Day lows, our work suggested that the tariff proposal at that time would essentially take current year growth to essentially flat (in a worst case)," strategist Scott Chronert wrote. "From that point, tariff negotiations, Q1 earnings results (with renewed conviction in the AI infrastructure build out), OBBBA tax reforms, and now Q2 results all support higher index level earnings growth expectations." The U.S. has announced several trade deals since the April stock market low, including one with the European Union and another with Japan. On top of that, second-quarter earnings have largely beaten expectations. FactSet data shows that nearly 82% of S & P 500 companies have topped analysts' estimates. Chronert said corporate profits should remain strong. "After steady downward revisions to consensus over the past year, we are now seeing a positive inflection. We expect that tax reform aspects of OBBBA can still be an upside surprise factor relative to 2H consensus," he said. The One Big Beautiful Bill Act was signed into law on July 4. Stocks are coming off a winning week in which the S & P 500 ended just below its record closing high, while the Nasdaq Composite made a fresh all-time high. This week could be a bumpy one for investors, however, with key U.S. inflation data for July slated for release Tuesday and Thursday. Elsewhere Monday on Wall Street, Wells Fargo raised its price target on Nvidia to $220, implying 20% upside , after the chipmaker reportedly agreed to give the U.S. government 15% of revenue from some chip sales to China in exchange for an export license to the country.
