Deutsche Bank Says Trump May Ease Policies if Economy Falters, Keeps Bullish S&P 500 Target
With markets entering the typically sluggish September–October stretch, investors are asking how much upside remains after a strong first half. Despite record closes for the S&P 500 and Nasdaq this week, investor optimism has slipped to a five-month low.
Enter Deutsche Bank. Led by chief global strategist Binky Chadha, the bank has reinstated its bullish 7,000 year-end target for the S&P 500 — one of the most optimistic calls on Wall Street. The bank had cut its forecast to 6,150 in April, then raised it to 6,550 in June as tariff concerns eased. Now, it’s back at 7,000, citing resilient earnings and manageable tariff impacts.
Chadha’s team argues that while tariffs may weigh more over time, companies have kept the hit modest by raising prices carefully and deploying other mitigation strategies. Inflationary pressure, they say, will be far less severe than during 2021–2022 and largely temporary.
Deutsche Bank also raised its 2025 S&P 500 earnings forecast to $267–$277, with 2026 expected to reach $315. Equity positioning adds to the bullish case: systematic strategies are overweight stocks, but fundamentals-driven investors remain cautious. If those discretionary investors put sidelined cash to work, it could fuel further gains.
Another potential tailwind? The Trump administration itself. Deutsche Bank suggests that if economic risks around trade, immigration, or tariffs begin to hit growth and dent consumer confidence — and by extension presidential approval ratings — the administration could back off some policies to support the economy and markets.
Technically, Deutsche Bank notes the S&P 500 has been in a “robust uptrend channel” since mid-2022, pointing squarely at 7,000 by year-end. Sector-wise, the bank is overweight financials and consumer cyclicals, while staying neutral on tech as the rally broadens beyond megacaps.
