This follows similar moves by Goldman Sachs and UBS Global Wealth Management, which raised their forecasts in May, with RBC Capital Markets joining the trend yesterday.

“We now see the tariff drag at only about one-third of what we previously penciled in,” Deutsche Bank strategists led by Binky Chadha wrote in a note yesterday.

The new target is 10.35% above the S&P 500 index’s last close of 5,935.94.

The S&P 500 posted its strongest monthly gain since November 2023 in May, boosted by US President Donald Trump’s softer stance on tariffs, strong corporate earnings, and tame inflation data that helped markets recover from April’s decline.

Still, the European brokerage warned that the rally could be volatile, with potential pullbacks driven by renewed trade tensions.

“We expect the rally to be punctuated by sharp pullbacks on repeated cycles of escalation and de-escalation on trade policy”, the brokerage said.

Deutsche also increased the estimate for the index’s earnings per share to US$267 from US$240.