Yardeni Cuts S&P 500 Year-End Target to 7,900 as Bond Yields Hit 17-Year High

TLDR

• Ed Yardeni cut his year-end S&P 500 target from 8,400 to 7,900, citing rising bond yields and Middle East tensions
• The 10-year Treasury yield briefly broke above 5% for the first time since 2007
• Yardeni raised his recession probability to 30% from 20% over the next three to six months
• Wells Fargo also cut its year-end S&P 500 target, from 7,950 to 7,700
• Yardeni kept his long-term S&P 500 target of 10,000 by end of the decade unchanged

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Longtime market bull Ed Yardeni cut his year-end S&P 500 price target to 7,900 from 8,400 on Tuesday, pointing to rising bond yields and growing risks from the Middle East conflict.

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

The new target still represents a roughly 4% gain from where the index closed on Tuesday at 7,585. But it marks a clear shift from Yardeni’s more bullish stance just weeks ago.

Bond Yields Drive the Target Cut

The yield on the 10-year Treasury briefly crossed 5% on Tuesday, its highest level since 2007, before closing at 4.995%. Yardeni had previously said he would not be alarmed as long as yields stayed in a 4% to 5% range.

That range is now being tested. Yardeni lowered his forward price-to-earnings estimate for the S&P 500 to 18.6 from 19.8, directly tied to the higher yield environment.

He warned that if oil prices stay elevated, they could keep pushing bond yields higher. That, combined with stubborn inflation, could push the Federal Reserve toward rate hikes.

The Fed was expected to announce a quarter-point rate increase on Wednesday following its policy meeting.

Middle East Conflict Adds Pressure

Yardeni cited the escalating conflict in the Middle East as a key driver of his more cautious view. Iranian-backed Houthis have seized territory in Yemen, including the Red Sea port of Mokha, tightening pressure on global energy markets.

He also noted that Iran’s military aims to keep oil prices elevated heading into the U.S. midterms by targeting regional oil facilities.

Oil prices have risen since the U.S. and Israel launched air strikes against Iran on February 28. Those strikes killed Iran’s supreme leader.

Over the weekend, Yardeni had already trimmed his odds of a “Roaring 2020s” scenario from 80% to 70% and raised his recession probability to 30% from 20%.

Other Strategists Also Turning Cautious

Wells Fargo cut its own year-end S&P 500 target from 7,950 to 7,700 around the same time. Analyst Ohsung Kwon said the firm had grown more cautious heading into September, expecting multiple compression to offset stronger earnings forecasts.

Wells Fargo raised its earnings forecasts to $425 per share for 2027 and $460 for 2028, but still sees limited upside and a possible 5% to 10% pullback from current levels.

Yardeni’s previous target of 8,400 is now effectively his mid-2027 forecast. His 2027 earnings-per-share estimate stays at $425, above the Wall Street consensus of $419.53.

He kept his end-of-decade S&P 500 target at 10,000 and said he still expects the U.S. economy to grow without a recession through 2030.