Deutsche Bank Predicts Market Upside

Deutsche Bank Eyes S&P 500 at 7,000, Says Trump May Soften Policies if Economy Weakens

As markets head into the seasonally slower months of September and October, investors are questioning how much momentum remains. While the S&P 500 and Nasdaq notched fresh highs this week, sentiment has slipped to a five-month low.

Still, Deutsche Bank remains bullish. Chief global strategist Binky Chadha and his team have reinstated their 7,000 year-end target for the S&P 500, putting them at the high end of Wall Street forecasts. The bank had previously cut its target to 6,150 in April before lifting it to 6,550 in June on easing tariff concerns.

In a new note, the strategists said strong second-quarter earnings and limited tariff damage justify their outlook. Companies, they argue, have absorbed most of the impact through pricing and other measures, with inflation pressures expected to remain modest compared with 2021–2022. Deutsche Bank also raised its 2025 earnings forecast for the index to $267–$277, with 2026 projected at $315.

Positioning could provide an additional boost. While systematic strategies are overweight U.S. stocks, fundamentals-based investors have stayed neutral since July. A shift from that group, Chadha’s team said, could unlock further upside.

The Trump administration may also become a factor. If trade or policy risks begin to drag on growth and consumer confidence — and, in turn, presidential approval ratings — Deutsche Bank expects the White House to ease course in support of the economy and markets.

Technically, the S&P 500 has been climbing within a strong uptrend channel since late 2022, one that points to 7,000 by year-end. Sector-wise, Deutsche Bank is overweight financials and consumer cyclicals, while staying neutral on technology as the rally broadens beyond megacaps.