Wall Street is getting a lot more comfortable with higher stock prices, but Ed Yardeni is moving the goalpost in a big way.
According to a Fortune report, the veteran market watcher just raised his 2026 year-end S&P 500 forecast to 8,250 from 7,700.
For perspective, that’s the most bullish call among the top Wall Street forecasters, and represents over a 11% jump from the S&P 500’s most recent close.
However, the rationale is far from new, as it centers on robust earnings expected to continue pushing stocks higher.
Similarly, I last covered RBC Capital Markets’ revamp of its S&P 500 target, driven by strong corporate earnings.
The firm raised its 12-month target to 7,900 from 7,750, arguing that momentum is driven by real earnings growth rather than just enthusiasm for AI and Fed rate-cut hopes.
Goldman Sachs makes a change
Speaking of rate cuts, in a piece I covered recently, Goldman Sachs just pushed back its timeline for Federal Reserve easing.
The bank believes sticky inflation, driven by elevated energy costs, will keep policymakers on the fence. Consequently, it pushed back its next two Fed rate cuts to December 2026 and March 2027.
Yardeni also acknowledges that the rally has been far from clean.
Markets have been up against it, weighed down by the Middle East conflict, oil supply fears, and higher-for-longer inflation.
The latest inflation data complicates the bullish setup, though.
The March CPI rose 3.3% year-over-year, up considerably from 2.4% in February, while energy prices surged 12.5% year-over-year.
The Fed’s preferred PCE gauge shot up to 3.5% in March from 2.8% in February.
Still, he views the economy as resilient, with corporate earnings expected to surprise. Yardeni is of the opinion that the current is increasingly backed by hard numbers rather than just market enthusiasm.
Why Wall Street listens to Ed Yardeni
Yardeni brings a ton of experience to the table, rather than a quick sound bite on the stock market.
The long-time market guru has built one of the most enviable resumes on Wall Street.
Before starting his own Wall Street research shop in 2007, Yardeni worked as chief strategist for Oak Associates, Prudential Equity Group, and Deutsche Bank’s U.S. equities business.
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On top of that, he built his chops on the macro side, holding leading roles at CJ Lawrence, Prudential-Bache Securities, and EF Hutton.
He also has deep experience on the academic side, having taught at Columbia University’s Graduate School of Business and worked at the Federal Reserve Bank of New York, the Federal Reserve Board of Governors, and the U.S. Treasury Department.
He’s perhaps best known for coining the “Fed model,” a valuation approach that compares the forward earnings yield of the stock market with the nominal yield on long-term government bonds.
On top of that, Yardeni’s market commentary is often featured in some of the most reputable financial publications, including The Wall Street Journal, the Financial Times, and the New York Times.
Stocks and gold have split sharply
The SPDR S&P 500 ETF Trust (SPY) has performed much better than the SPDR Gold Shares (GLD) over shorter time frames, though gold is still more attractive over the past six months.
- Past month: SPY is up 7.60%, while GLD is down 0.77%.
- Past 3 months: SPY is up 5.93%, while GLD is down 7.12%.
- Past 6 months: SPY is up 5.93%, while GLD is up 17.71%.
- Year to date: SPY is up 7.28%, while GLD is up 9.45%.
Source: Macromicro ETF performance data for SPY and GLD.
Earnings drive Yardeni’s S&P 500 call
As discussed earlier, Yardeni’s upgrade has everything to do with the S&P 500’s strong earnings season.
The core of the call can be broken down into three points:
- Bottom-line expectations are rising: Yardeni bumped his 2026 S&P 500 EPS view to $330 from $310.
- The out-year picture improved: His 2027 EPS estimate jumped to $375 from $350.
- Sales are moving higher too: Revenue-per-share forecasts skyrocketed by $100 for both years, to $2,200 in 2026 and $2,300 in 2027.
Additionally, Yardeni raised the odds that his “Roaring 2020s” scenario continues to 80% from 60%, folding in his previous 20% meltup case.
He is keeping recession odds at 20%, while warning that renewed fighting could create stagflation and push bond yields higher.
Even so, Yardeni maintained his long-term 10,000 S&P 500 target for the end of 2029, saying it “might arrive ahead of schedule.”
Where other Wall Street firms see the S&P 500 headed
- Bank of America: 7,100.
- UBS Global Wealth Management: 7,500.
- Citigroup: 7,700.
- Morgan Stanley: 7,800.
- RBC Capital Markets: 7,900.
- Goldman Sachs: 7,600.
- Barclays: 7,650.
- JPMorgan: 7,600.
Related: Goldman Sachs sends blunt message on Fed interest rate cuts
