A longtime market strategist says the stock market could surge further into the year-end as earnings and liquidity drive valuations higher.
In a new CNBC interview, Ed Yardeni, president of Yardeni Research, says the equity market’s complacency is justified by economic strength and resilient corporate profits.
Yardeni also sees the bull market extending into 2026, aided by a supportive rate environment and strong profit momentum.
“Yeah, it’s kind of an odd situation. We’ve got some indicators actually suggesting that at least retail investors aren’t as bullish as the data shows from the flows. But the complacency of the stock market so far is actually justified by the resilience of the economy, which is showing up in the resilience of earnings…
I play the odds just to simply convey my conviction level on these scenarios. So 50 percent is that we just get to, you know, 7,000 by the end of the year, 7,700 by the end of next year.”
He notes that potential rate cuts from the Federal Reserve could further fuel risk appetite.
“So it’s an ongoing bull market with the Fed cutting rates up ahead here by probably 50 basis points between now and year-end, and I don’t think those rate cuts are actually necessary. I think that just stimulates the economy more, but really the stock market more.
And if that’s the case, then I think we could get a melt-up, which would be much higher than 7,000, or we get to my levels a lot sooner.”
At the same time, Yardeni points to growing weaknesses in the labor market, citing supply constraints and the effects of AI adoption.
“The problems in the labor market are on the supply side. We’ve got the migration, immigration issues, the deportation issues. We also have the issue of baby boomers retiring, and maybe it’s not so easy to replace them with younger, inexperienced workers. And on the demand side, everybody’s spending money on AI to figure out whether they actually need to add to payrolls.”
Disclaimer: Opinions expressed at CapitalAI Daily are not investment advice. Investors should do their own due diligence before making any decisions involving securities, cryptocurrencies, or digital assets. Your transfers and trades are at your own risk, and any losses you may incur are your responsibility. CapitalAI Daily does not recommend the buying or selling of any assets, nor is CapitalAI Daily an investment advisor. See our Editorial Standards and Terms of Use.