Yardeni Research has lowered its year-end target for the S&P 500 index from 8,400 to 7,900. The firm cited rising Treasury yields and increased market uncertainty expected over the next three to six months as the primary drivers for this adjustment.
The strategist adjusted his scenario probabilities, raising the likelihood of a bearish market outcome from 20% to 30%. Simultaneously, the probability assigned to the firm’s long-term bull case, known as the Roaring 2020s, was reduced from 80% to 70%.
The revision stems from a lower forward price-to-earnings ratio, which was cut from 19.8 to 18.6 due to yield pressure. Despite this, the earnings-per-share estimate for 2027 remains unchanged at $425, and the long-term target of 10,000 for the end of the decade is still in place.
The previous target of 8,400 has been deferred to mid-2027. With the S&P 500 currently trading near 7,600, the new year-end forecast suggests an upside of approximately 4%. Yardeni maintains his outlook that the U.S. economy will avoid a recession through 2029.
