Stocks largely flat as Citi raises S&P 500 target

Stocks saw an upbeat opening on Monday, with markets showing further resilience amid a fresh forecast for the S&P 500 by strategists at Citigroup.

Dow Jones Industrial Average opened 67 points up, while the S&P 500 added 0.01% and Nasdaq Composite hovered at the flatline.

While stocks are largely flat, the slightly upbeat opening puts Wall Street on course for a winning start to the week, with traders set to focus on key factors such as U.S. inflation data, tariffs, and the geopolitical landscape.

Citigroup raises S&P 500 target for 2025

With the stock market in a winning mood despite negative catalysts, strategists at Citigroup have forecast that the S&P 500 Index will edge higher. According to Citi, the benchmark index will benefit from tax cuts, a scenario likely to offset any downside effects of tariffs.

The Citigroup strategists project the S&P 500 will reach 6,600 by the end of the year, a target that puts the index up 3% from its close around 6,300 last week. Bullish catalysts for the index include better-than-expected earnings, with 81% of companies that have reported so far beating analyst estimates.

Wall Street is notching these gains despite the tariff environment, with major deals and ongoing corporate strength helping buyers. Forecasts put year-end earnings per share estimates for the S&P 500 at $272 for 2025, up from the previous target of $261. Overall, the strategists project the S&P 500 to increase by about 8% to 6,900 by mid-2026.

Tariffs, inflation data remain in focus

In the short term, investors will focus on sectoral tariffs on semiconductor and pharmaceutical imports, the geopolitical environment, and the Consumer Price Index data scheduled for release on Tuesday. The Producer Price Index is set for Thursday, followed by the retail sales report on Friday.

Notably, interest rates are also a crucial market factor, with the Federal Reserve expected to raise rates in September. Fed governor Michelle Bowman, one of those to dissent at the central bank’s move to leave interest rates unchanged at the last meeting, says she sees three interest rate cuts in 2025. 

According to Bowman, not cutting through December risks harming the labor market and further slowing the U.S. economy.