Key Takeaways Market strategist Ed Yardeni lowered his S&P 500 year-end forecast from 8,400 to 7,900 amid escalating bond yields and geopolitical concerns The 10-year Treasury yield touched 5
Prominent market strategist Ed Yardeni revised his S&P 500 year-end projection downward to 7,900 from 8,400 on Tuesday, attributing the adjustment to climbing Treasury yields and heightened geopolitical tensions in the Middle East.
YARDENI SLASHES S&P 500 TARGET
Wall Street bull Ed Yardeni cut his year-end S&P 500 target to 7,900 from 8,400, citing rising bond yields and increased downturn risks over the next 3–6 months.
He lowered his expected forward P/E multiple to 18.6 from 19.8.
Yardeni still sees…
— *Walter Bloomberg (@DeItaone) September 16, 2026
Despite the reduction, the revised forecast still implies approximately 4% upside from Tuesday’s closing level of 7,585. However, it signals a notable departure from the more optimistic outlook Yardeni held only weeks earlier.
On Tuesday, the 10-year Treasury yield momentarily surpassed 5%, reaching its highest point since 2007, before settling at 4.995%. Yardeni had previously indicated comfort with yields remaining between 4% and 5%.
With that threshold now under pressure, Yardeni adjusted his forward price-to-earnings multiple for the S&P 500 downward to 18.6 from 19.8, reflecting the impact of the elevated yield environment.
He cautioned that sustained high oil prices could continue applying upward pressure on bond yields. Combined with persistent inflation concerns, this scenario might compel the Federal Reserve to consider raising interest rates.
Market participants anticipated a quarter-point rate increase from the Fed following Wednesday’s policy announcement.
Yardeni identified the intensifying Middle East conflict as a significant factor behind his revised stance. Iranian-backed Houthi forces have expanded control in Yemen, including capturing the Red Sea port of Mokha, which has heightened concerns about global energy supply chains.
He also highlighted Iran’s strategic interest in maintaining elevated oil prices in the run-up to U.S. midterm elections through potential attacks on regional energy infrastructure.
Energy markets have experienced upward pressure following U.S. and Israeli airstrikes against Iran on February 28, which resulted in the death of Iran’s supreme leader.
Earlier over the weekend, Yardeni had already adjusted his probability of a “Roaring 2020s” scenario downward from 80% to 70% while simultaneously increasing his recession probability from 20% to 30%.
Wells Fargo implemented a similar downward revision, lowering its S&P 500 year-end target from 7,950 to 7,700 during the same period. Analyst Ohsung Kwon explained the firm’s increasingly cautious stance heading into September, anticipating that valuation compression would counterbalance improved earnings projections.
While Wells Fargo elevated its earnings estimates to $425 per share for 2027 and $460 for 2028, the firm continues to see constrained upside potential and warns of a possible 5% to 10% market correction from present levels.
Yardeni’s previous 8,400 target now essentially serves as his mid-2027 projection. His 2027 earnings-per-share estimate remains at $425, exceeding Wall Street’s consensus of $419.53.
Despite near-term adjustments, he retained his decade-end S&P 500 target of 10,000 and maintained his expectation that the U.S. economy will continue expanding without entering recession through 2030.
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