Wall Street Strategist Lowers S&P 500 Target Amid Rising Bond Yields
Ed Yardeni, one of Wall Street's most bullish strategists on the S&P 500 index (SPY), has cut his year-end target from 8,400 to 7,900. The adjustment is attributed not to weaker earnings but rather rising bond yields that are compressing valuation multiples. Yardeni moved the original 2026 target of 8,400 to mid-2027 instead. Yardeni emphasized that corporate profits remain strong—up nearly 23% year-over-year—and he still expects robust earnings growth driven by AI-related leverage in large-cap tech stocks. However, the rising risk-free rate is reducing how much investors are willing to pay for each dollar of future cash flows from companies. The market has been reacting to these dynamics as yields on long-term Treasuries hover near 5%, and Yardeni anticipates further Fed tightening could continue pressuring valuations. Despite this, the revised target still implies a record high S&P level if achieved.
Topics: AI earnings Ed Yardeni interest rates S&P 500 SPY ETF