"Super bull" Ed Yardeni: The S&P will definitely break 8,000 by the end of the year, and break 10,000 in three years!

Strong corporate earnings are driving the S&P 500 index back to historic highs, with veteran Wall Street investment strategist Ed Yardeni sharply raising his forecasts for the U.S. stock market. He predicts the benchmark index will break through 8,000 points by year-end and reach the 10,000 level within three years.

According to Bloomberg, Yardeni has raised his year-end target for the S&P 500 from 7,700 to 8,250 points. This target is nearly 12% above last Friday’s closing level and is the most optimistic forecast among all strategists tracked by Bloomberg.

This latest statement marks a significant increase in confidence towards the U.S. stock market's outlook on Wall Street. The surge in earnings expectations triggered by strong first-quarter reports has not only helped the market reverse earlier geopolitical gloom but also established a fundamentals-driven market meltup trend.

Currently, several Wall Street institutions, including HSBC Holdings, have followed suit in raising their U.S. stock price targets. Despite technical signals indicating the market may be overbought in the short term, institutions generally believe market breadth still has room to expand, and any short-term consolidation will provide entry opportunities for investors.

Surging earnings expectations drive major upward revision of price targets

Strong first-quarter results are the core driver behind Ed Yardeni, chief investment strategist at Yardeni Research, raising his forecasts. In addition to raising his year-end target to 8,250 points, he simultaneously increased his S&P 500 earnings per share (EPS) forecast: this year’s EPS estimate has been raised from $310 to $330, and the 2027 estimate from $350 to $375.

Yardeni pointed out that as consensus expectations have now “far surpassed our previous targets,” his earlier forecasts can no longer reflect current bullish sentiment. In a report released Sunday, he wrote that the speed of consensus earnings estimate increases for this year and next has been unprecedented in recent months, directly resulting in an earnings-driven market meltup.

Supported by these fundamentals, Yardeni remains confident in the continuation of this bull market and expects what he calls the “roaring 2020s” to end at a high point. He maintains his long-term target of the S&P 500 reaching 10,000 points by the end of 2029, adding that the target “might be achieved ahead of schedule.”

Wall Street peers follow with bullish views; technology and AI are key drivers

Yardeni is not the only strategist to raise the benchmark price target for the stock market.

HSBC Holdings strategists Nicole Inui and Alastair Pinder lifted their year-end S&P 500 target from 7,500 to 7,650 points, citing strong earnings and the rebound of tech stocks. CFRA Research’s Sam Stovall also raised his year-end target last week from 7,400 to 7,575 points.

HSBC’s strategists noted in a client report on Monday that, similar to Yardeni’s view, they also believe the S&P 500 has the potential to break above 8,000 points. The main driving factors for this potential include a rebound in the tech sector, continued adoption of artificial intelligence (AI), and easing concerns about geopolitics, trade, and interest rates.

However, Inui and Pinder also cautioned that the current market sentiment “feels slightly shaky,” and the recent advance has been relatively narrow in breadth. They added that, as most stocks are still trading below their 52-week highs, the market still has further upside potential.

Technical indicators show overbought signals; geopolitical conflicts remain key tail risks

After consecutive advances, technical indicators for U.S. stocks have started to show signs of overheating.

CFRA Research’s Stovall noted the S&P 500’s 14-day relative strength index (RSI) is currently at 75, above the critical level of 70 which signals overbought assets. This suggests the index may need to pause.

Overheating signals are not limited to the benchmark index. The Nasdaq 100, as well as the information technology and communication services sub-indexes within the S&P 500, have all shown overbought signals. Additionally, out of the 155 sub-industries in the broader S&P 1500 Index, 9% have flashed overbought signals.

Despite this, Wall Street remains positive on any potential pullback. Since the five-week selloff triggered by geopolitical shocks in late February, U.S. stocks have reversed their slump, buoyed by improved earnings and Middle East outlook, recording the longest six-week consecutive rally since October 2024. In his Monday report, Stovall stated that digesting recent gains will provide bulls with a “buy-the-dip” opportunity and restore the upward trend.

Although the stock market’s response to geopolitical developments is currently muted, ongoing hostilities in the Middle East remain a major threat to the market’s rebound. Currently, Washington and Tehran have not agreed to end the war, and U.S. President Trump said the U.S.-Iran ceasefire agreement is vulnerable and “is surviving on life support.”

Direct macroeconomic impacts are reflected in the energy market, with oil prices still remaining high. Yardeni warned that if a new round of conflict breaks out, “the situation could become much more difficult,” as this could lead to economic stagflation, posing a substantial threat to the current market meltup.

Risk DisclaimerThe market involves risks; investment requires caution. This article does not constitute personal investment advice and does not take into account individual users’ specific investment goals, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article fit their particular circumstances. If you invest based on this, you assume sole responsibility.