A team of analysts at Citigroup (NYSE:C) has raised its target level for the S&P 500 for the end of this year. Despite the lift, however, the big bank's new estimate is nearly 10% below the current level of the benchmark stock index.

Citigroup upped its estimate to 2,900 from the previous 2,700. The analysts believe that "powerful fiscal and monetary stimuli" that will likely soon rain onto the market justify a bump in its target.

They still feel, however, that the stock market in general and the S&P 500 specifically are in for a tough time in the second half of this year.

Falling stock price indicated on an electronic graph.

Image source: Getty Images.

A big reason for this is that the period follows a surprisingly buoyant Q2, in which bullish investors pushed the index up by 20%. This was greatly assisted by the government's economic stimulus measures and various means of support from the Federal Reserve such as a cap on dividend payouts from major banks.

In the second half of the year, though, "[w]e envision volatility for equities as good news is being priced in and problems are being overlooked," warned Citigroup's chief U.S. equity strategist Tobias Levkovich, the head of that team of analysts.

Prominent among these difficulties is, of course, the resurgent coronavirus outbreak. With cases again rising sharply in many locations and businesses reclosing (either by mandate or voluntarily), overall economic activity is set to constrict between now and the end of the year.

For the S&P 500 to rise substantially, Levkovich said that corporate earnings have to rebound "in a very meaningful way." That's not going to be easy, since -- despite employee layoffs and furloughs -- many companies have been stuck with significant fixed costs against sudden drops in revenue.