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The Strategist Who Wanted 8,400 on the S&P 500 Just Cut His Number, and It Is Not Because Earnings Got Worse
Yardeni said rising Treasury yields and higher oil prices increase the risk of a downturn over the next three to six months.
On Wednesday, Sept. 16, Yardeni Research president Ed Yardeni cut his year-end S&P 500 target to 7,900 from 8,400, suggesting minimal upside for the final 3.5 months of 2026.
Rising US10Y yields climbed to 5.041% this week, fueling Yardeni's caution as he warned, "the risks of a downturn have increased over the next three to six months" due to higher energy prices.
The Federal Open Market Committee announced a quarter-point rate hike to 3.75% to 4.00% on Wednesday, a move investors anticipated following hotter-than-expected inflation data released last week.
Savita Subramanian, Bank of America's head of U.S. equity strategy, noted markets are overdue for a pullback; the S&P 500 experienced only one decline of at least 5% in 2026.
Despite near-term caution, Yardeni remains bullish long-term, reiterating his end-of-decade target of 10,000 for the S&P 500 and expecting the economy to "grow without a recession through the end of the decade.