(Reuters) - Barclays on Tuesday lifted its 2024 target for the benchmark S&P 500 index to 5,600 from 5,300 as it expects strong profit growth for mega-cap technology firms.

The brokerage has joined peers like Citigroup and Goldman Sachs in raising their annual targets for the index on hopes of a "soft landing" in the U.S. and an interest rate cut from the Federal Reserve later this year.

In February, Barclays bumped up its 2024 target for the index to 5,300, pointing to resiliency in the U.S. economy and robust earnings for Big Tech firms.

The fervor around artificial intelligence (AI) and the increased likelihood of a Fed rate reduction in 2024 have driven the S&P 500 to record highs this year. The index closed at 5,564.41 points on Monday and is up 16.6% so far this year.

Barclays also raised its 2024 earnings per share (EPS) forecast for index companies to $241 from $235.

"While our valuation assumption for Big Tech is high, growth-adjusted multiples are reasonable and we expect the group to earn into its valuations," Barclays strategists said in a note.

Major tech stocks, such as the Magnificent 7, which includes Apple and Nvidia , continue to report robust results, but disinflation would pressure earnings for the rest of the S&P 500, Barclays said, although the impact would be smaller.

Meanwhile, the brokerage said it has turned "positive" on the utilities sector on expectations of higher earnings growth compared to other S&P 500 stocks.