Ed Yardeni, president of Yardeni Research and a notably optimistic Wall Street forecaster, is signaling growing concern about market stability even as he keeps a bullish long-term target for the S&P 500. Yardeni continues to forecast a climb to 7,000 for the index, a target surpassed only by Oppenheimer’s 7,100 estimate. However, he has increased his assessment of downside risk: the probability of a recession and accompanying bear market has risen to 35% from his earlier 20% estimate.
A particular risk Yardeni highlights is what he calls “Trump Tariff Turmoil 2.0.” He warns that renewed tariff-driven tension could spark a rare, sharp market drop — a “flash crash” — that might occur even in the absence of a full-blown recession. He draws parallels to historical abrupt selloffs in 1962 and 1987, episodes that reversed quickly without triggering prolonged downturns. As a result of these heightened geopolitical and trade risks, Yardeni now assigns a 65% probability that the current bull market will continue without a major correction through 2025, down from his prior 80% estimate.
Despite raising the odds of a nearer-term correction, Yardeni retains a largely favorable long-term view. He still places a 55% probability on a sustained bull market — a “Roaring 20s” scenario — extending into the 2030s. That longer-run outcome, he stresses, depends heavily on trade tensions not worsening. Another important shift in his outlook is his reduced reliance on what market participants call the “Fed put.” Following Federal Reserve Chair Jerome Powell’s signals that the central bank is not in a hurry to cut interest rates, Yardeni no longer assumes that the Fed will step in quickly to support asset prices.
Even with these caveats, Yardeni emphasizes that the underlying economy remains resilient. He points to insider buying activity in cyclical sectors as a constructive sign, suggesting that corporate insiders may be positioning for better growth ahead. This insider activity, combined with the longer-term structural factors he cites, could create selective buying opportunities for investors who can tolerate the elevated near-term risks Yardeni now sees.
In summary, Yardeni’s updated stance balances continued optimism about long-term market gains with a clearer acknowledgment of risks. He has raised the probability of recession and bear-market outcomes, warned of potential tariff-driven volatility, and reduced confidence in an immediate Fed-led market backstop. At the same time, he maintains a bullish S&P 500 target and a conditional belief in a durable bull market so long as trade tensions do not escalate and economic resilience persists.