{"id":481370,"date":"2026-06-07T22:06:10","date_gmt":"2026-06-07T22:06:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/481370\/"},"modified":"2026-06-07T22:06:10","modified_gmt":"2026-06-07T22:06:10","slug":"citi-quietly-resets-sp-500-price-target-for-the-rest-of-2026","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/481370\/","title":{"rendered":"Citi quietly resets S&P 500 price target for the rest of 2026"},"content":{"rendered":"\n

Wall Street<\/a> spent the bulk of 2026 figuring out whether the stock market has come too far, too fast.<\/p>\n

However, according to TheFly<\/a>, Citi analysts are looking past the immediate damage as they revamp their S&P 500<\/a> target.<\/p>\n

They make the case that something far more durable may be taking shape, specifically a robust profitability cycle driven by heavy AI<\/a> infrastructure spending.<\/p>\n

For perspective, stock market gains typically come from a couple of places.<\/p>\n

Investors can either pay more for the same level of earnings, pushing prices higher, or businesses can actually make a lot more money, offering a sturdier foundation.<\/p>\n

Citi\u2019s Scott Chronert is leaning heavily on the latter.<\/p>\n

His updated S&P 500 forecast hinges on genuine, sustainable earnings growth, a thesis that could potentially revitalize Wall Street.<\/p>\n

Moreover, it comes at a point where the markets are dealing with renewed inflation<\/a> worries, Middle-East related tensions, and higher rate fears.<\/p>\n

For context, the S&P 500 closed Friday, June 5, at 7,383.74, down 200.57 points, or 2.64% after hitting a record close of 7,609.78 on June 2.<\/p>\n

The big drop on Friday was linked to a stronger-than-expected May jobs report<\/a>, which showed the U.S. economy adding 172,000 jobs. The report fueled some major concerns about the Federal Reserve<\/a> keeping interest rates higher for longer.<\/p>\n

Chip stocks took the hardest hit, with the Philadelphia Semiconductor Index losing north of $1 trillion in value according to Reuters<\/a>, with Nvidia<\/a>, Intel, AMD<\/a>, and Broadcom among the losers.<\/p>\n

Over the past three months, though, the trend has been mostly positive.<\/p>\n

The S&P 500 was up 553.03 points, or 8.10%, since March 5, despite the Friday debacle.<\/p>\n

Citi analysts, though, feel it\u2019s more of a temporary blip, with Citi forecasting that the AI spending wave becomes large enough to efficiently reshape the market\u2019s earnings power.<\/p>\n

\"Citi Citi raised its 2026 S&P 500 target, citing stronger earnings and AI-driven growth prospectsMichael M&period; Santiago &sol; Getty Images Wall Street price targets for the S&P 500 Citi\u2019s S&P 500 call leans on stronger earnings\u00a0 <\/p>\n

Chronert and his team raised the bank\u2019s year-end 2026 S&P 500 target to 8,100, up from 7,700.<\/p>\n

More Wall Street:<\/p>\n

That\u2019s a 400-point increase, or a 5.2% increase from the previous forecast.<\/p>\n

Chronert\u2019s case is purely built on the strength of earnings, and he now expects the S&P 500 index-level earnings to surge to an eye-catching $350 in 2026, with early estimates of $400 in 2027.<\/p>\n

S&P 500 earnings over the past 5 years <\/p>\n

Using S&P 500 operating EPS as the index-level earnings measure, here\u2019s how the S&P 500 has performed over the past five years:<\/p>\n

That offers strong visibility for the index even if valuation multiples stop growing.<\/p>\n

Anyone who follows the stock market has heard about the AI bubble like a broken record, and has spent time worrying about when it might burst.<\/p>\n

The AI trade has been criticized for being too dependent on investor enthusiasm.<\/p>\n

In fact, in a recent post, I covered Fed President Mary Daly<\/a>, who said that 2027 could be a litmus test for AI stocks and noted that many of the promised productivity gains have yet to come to fruition.<\/p>\n

However, Citi\u2019s view is that AI infrastructure spending is feeding directly into corporate fundamentals<\/a>, especially for the top names in tech.<\/p>\n

Chronert said that the market\u2019s tremendous growth cluster currently represents 45% of the S&P 500 earnings weight, up from 15% roughly three decades ago.<\/p>\n

That essentially means that the businesses most exposed to AI spending carry a lot more influence than they previously did.<\/p>\n

On top of that, Citi expects price-to-earnings multiples to drop as the AI cycle matures.<\/p>\n

For some color, the S&P 500 is currency trading at a remarkably elevated valuation at a trailing P\/E at about 25.6 according to GuruFocus<\/a>, while FactSet <\/a>puts the forward 12-month P\/E at 21.1, comfortably above the 5-year average of 19.9.<\/p>\n

S&P 500 year-end closes <\/p>\n

2025: 6,845.50 (+16.39% from 2024).<\/p>\n

2024: 5,881.63 (+23.31% from 2023).<\/p>\n

2023: 4,769.83 (+24.23% from 2022).<\/p>\n

2022: 3,839.50 (-19.44% from 2021).<\/p>\n

2021: 4,766.18 (+26.89% from 2020).
Source: YCharts.<\/p>\n

Related: Bank of America resets Broadcom stock price target after earnings<\/a><\/p>\n

This story was originally published by TheStreet<\/a> on Jun 7, 2026, where it first appeared in the Investing<\/a> section. Add TheStreet as a Preferred Source by clicking here.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Wall Street spent the bulk of 2026 figuring out whether the stock market has come too far, too…\n","protected":false},"author":2,"featured_media":481371,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,35940,4776,85,46,1010,196],"class_list":["post-481370","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-citi","tag-earnings-growth","tag-il","tag-israel","tag-sp-500","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/481370","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=481370"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/481370\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/481371"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=481370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=481370"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=481370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}