Citigroup raised its year-end target for the S&P 500 index to 6,600, betting on U.S. President Donald Trump's tax and spending bill boosting corporate earnings.

This marks Citigroup’s second upward revision in just two months, and also follows similar upgrades from major brokerages including HSBC, Goldman Sachs and BofA Global Research.

The new target represents a 3.2% upside to the index's last close at 6,389.45. Its previous target in June was 6,300.

The expected fundamental drag from U.S. tariffs has been mostly modeled at this point, Citi analysts said in a note late on Friday, adding that tax benefits from the spending bill should improve forward earnings.

The bill, signed into law on July 4, 2025, delivers sweeping corporate tax relief and permanently expands employee benefit options.

Since bottoming on April 8 after Trump's 'Liberation Day' tariffs, the benchmark index has rebounded 32.2%, reaching new highs in July as robust Big Tech earnings revived investor confidence in the AI-driven rally.

Citi said impressive earnings from the "Magnificent Seven" tech companies have anchored the rise of the index. The rest of the index is starting to strengthen more broadly, it said.

In a bull case scenario, Citi expects the index to hit 7,200 points.

The Wall-Street brokerage also revised its 2025 and 2026 earnings per share forecast to $272 and $308 respectively for the index, up from prior forecast of $261 and $295.