A Higher Bar: Why Jefferies Now Sees the S&P 500 at 6,600 by Year-End

Jefferies started the week by rewriting its scoreboard for U.S. stocks. The firm now expects the S&P 500 to finish the year near 6,600, a full thousand points above its old mark and a clear nod to profits that refused to roll over. The story behind the new target is part math, part mood: earnings have outrun cautious forecasts, and the Federal Reserve is closer to taking its foot off the brake, which together give equities more room to run.
First, the math. Company after company spent the spring proving that margin work and productivity gains weren’t just talking points. Top-line growth held up in more places than it sagged, and the biggest platforms continued to convert secular AI demand into real revenue. Jefferies’ bottom-up estimates now put index earnings in the neighborhood of the mid-$260s for this year with a sturdier base for 2026, enough to justify a higher index level without heroic assumptions about valuations. That revision trend matters; when estimates rise, stocks usually do too.
Second, the mood. Powell’s Jackson Hole message—ready to ease if the evidence cooperates—has shifted the conversation from “if” to “when.” Jefferies is planning for rate relief to begin as soon as September, a shift that eases financial conditions without shouting “recession.” Lower discount rates help long-duration growth names, of course, but the firm also points to improving fundamentals in financials and other cyclicals as credit spreads behave and loan growth stabilizes. That mix broadens the rally beyond the familiar handful of giants.
Skeptics have ammunition. The spring reminded everyone how quickly an index can lurch when policy or geopolitics intrude; April’s tariff scare carved several percentage points off the tape in a hurry. And in crowded trades—AI hardware, for example—investors will keep demanding proof that supply ramps and end-market demand are in sync. Jefferies isn’t blind to those risks; its path to 6,600 assumes that inflation keeps gliding toward target, that the job market cools rather than cracks, and that forward guidance stays tight enough to avoid another expectations bubble.
Still, the upgrade resets the center of gravity. It says the default setting for this market is neither euphoria nor doom, but execution—earnings delivered, balance sheets tended, capital returned. If that continues, the firm argues, there’s room for both the secular growth engines and the better-run cyclicals to contribute, with buybacks smoothing the ride. If it doesn’t—if the next inflation print runs hot or a marquee AI name stumbles—investors should expect chop, not collapse.
In other words, the destination is clearer than the road. Jefferies believes the S&P 500 can finish the year deeper into record territory because the profit machine is still humming and the cost of money is about to bend lower. Getting there will still require passing a few tests—PCE on Friday, payrolls after that, and a heavyweight earnings report or two. But after months of debating macro shadows, this call plants a flag where it counts: in the numbers.