Stocks Get Another Upgrade on Wall Street as Tariff Fears Fade

Another Wall Street firm turned more bullish on the stock market on Wednesday, as analysts came around to the possibility the worst of this year’s tariff shock is in the rearview mirror. 

“Peak tariff uncertainty is likely passed, which should allow modest valuation expansion from here,” wrote Barclays analysts, who raised their year-end S&P 500 forecast to 6,050 from 5,900 on Wednesday. 

Several other firms have raised their targets for the index in recent weeks, citing easing global trade tensions, continued resilience of the U.S. economy, and the stimulative potential of the tax and spending bill working its way through Congress. Deutsche Bank on Tuesday raised its year-end forecast to 6,550, and UBS last week lifted its target to 6,000.

The stock market’s outlook may have improved in the last month, but it remains drearier than at the start of the year, when investors were optimistic about President-elect Donald Trump’s pro-growth, business-friendly agenda. Only two Wall Street firms tracked by CNBC‘s Market Strategist Survey have not lowered their expectations for the S&P 500 this year.

Barclays analysts left their forecast for S&P 500 full-year earnings per share unchanged at $262, down from $271 at the start of the year. Many of President Trump’s tariffs have been delayed or diluted, but those that remain are expected to directly subtract nearly $10 from the index’s EPS. Slower international growth and diminished consumer spending are expected to detract an additional $1 and $2.10, respectively. Better-than-expected first-quarter earnings and tariff-induced inflation are forecast to offset some of those headwinds. 

Barclays expects corporate earnings growth to normalize in 2026, when—assuming tariff rates remain unchanged—the direct drag from duties will get lost in year-over-year comparisons. Tariffs are still expected to weigh on consumer spending and slow global growth, but those headwinds should be more than offset by AI-driven growth. The firm expects the S&P 500 to end 2026 around 6,700, about 12% above Tuesday’s close.