Ed Yardeni Cuts S&P 500 Year-End Target to 7,900 From 8,400 but Keeps 10,000 Call for End of Decade

Yardeni Research now expects the S&P 500 to finish 2026 at 7,900, moving its previous 8,400 year-end target to mid-2027. According to an Oct. 14 note, the firm lowered its year-end forecast for the index's forward P/E ratio to 18.6 from 19.8. "Our concern isn't earnings; it's stock valuations," Ed Yardeni said.
Yardeni still expects earnings of $425 per share in 2027, slightly above the analyst consensus of $423.08, and no U.S. recession through the end of the decade. The firm still expects the S&P 500 to reach 10,000 by the end of the decade. It raised the probability of its pessimistic scenario to 30% and cut the probability of its "Roaring 2020s" scenario to 70% from 80%, citing greater geopolitical and market risks.
The S&P 500 fell 1.1% to 7,718.94 on Oct. 14, while the Nasdaq Composite and Russell 2000 each fell 1.9%. The iShares Semiconductor ETF dropped 4.5%.
Yardeni's own earnings forecasts are $450 in 2028, $475 in 2029 and $500 in 2030, more conservative than analysts' expectations of $489 in 2028. At $500 in earnings, an S&P 500 level of 10,000 would imply a P/E ratio of 20.
According to Reuters, third-quarter earnings growth of 30.6% is heavily concentrated in the largest tech companies, and more than 40% of S&P 500 stocks were down for the year as of Oct. 12, while the index was up about 14%.