Deutsche Bank strategists increased their year-end target for the to 5,500, up from the previous 5,100.

The revision is based on a strong earnings cycle and the anticipation that market confidence will grow by the end of the year, which should positively influence US stocks.

"We see the earnings cycle having plenty of legs,” strategists said in note to clients on Friday.

“While all the growth may not materialize this year, we see market confidence in a continued recovery rising by year end, supporting equity multiples.”

However, the strategists also cautioned about potential market volatility due to geopolitical risks. Moreover, they warned that a hung election poses a "real risk" for markets.

The brokerage firm noted that although all growth may not materialize this year, the market's confidence in a continued recovery is expected to rise by year-end. This sentiment is projected to support equity multiples.

Alongside the revised index target, Deutsche Bank has also raised its base case for S&P 500 earnings to $258 per share from the previous estimate of $250. This adjustment indicates a year-over-year growth of 13%.

If the macroeconomic growth continues to exceed trends as it has for the past seven quarters, the strategists suggest earnings could reach as high as $271 per share, which is at the upper end of their original forecast range of $250 to $271.