Edward Yardeni, president of Yardeni Research, raised his year-end S&P 500 forecast to 8,400 [1].
The revision signals strong confidence in the resilience of U.S. corporate profits despite broader concerns about artificial intelligence fatigue and market volatility.
Speaking during a Bloomberg Television interview, Yardeni said he has a case of "FEMO," which he defined as "fabulous earnings momentum" [1]. He said the stock market looks "very solid" from an earnings standpoint [3].
This bullish outlook comes as the economist reassesses the risk of a broader economic downturn. Yardeni said the probability of a U.S. recession in 2026 has fallen to 19% [2].
While some investors fear a "melt-up" scenario, where prices rise rapidly without fundamental support, Yardeni said the current growth is rooted in actual corporate performance [2]. He said the strength of recent earnings reports is sufficient to sustain the upward trajectory of U.S. equities [3].
Analysts have closely watched the S&P 500 as it navigates the balance between high valuations and the productivity gains promised by new technology. Yardeni's updated target of 8,400 [1] reflects a belief that these gains are manifesting in the bottom line of major companies.
“"FEMO," or fabulous earnings momentum”
Yardeni's aggressive price target and lowered recession probability suggest a belief that the U.S. economy is entering a period of sustainable growth rather than a speculative bubble. By anchoring his forecast to 'earnings momentum,' he is arguing that fundamental corporate health is outpacing the risks of market fatigue.
