Wall Street's biggest bull Yardeni "defects": Cuts S&P 500 target to 7,900 one month after raising forecast, warns of rising economic downside risks Wall Street's biggest bull Yardeni "defects": Cuts S&P 500 target to 7,900 one month after raising forecast, warns of rising economic downside risks

Wall Street's biggest bull Yardeni "defects": Cuts S&P 500 target to 7,900 one month after raising forecast, warns of rising economic downside risks One of Wall Street's biggest bulls, Ed Yardeni, has sharply cut his year-end S&P 500 target just one month after raising it, citing rising economic downside risks over the next three to six months. The president and chief investment strategist of Yardeni Research Inc. lowered his year-end S&P 500 target to 7,900 from 8,400, which as of last month was still the highest estimate on Wall Street. The new target implies 4.1% upside from the index's Tuesday close and places him in the middle of the pack among more than 20 strategists surveyed by the market. "Given the recent rebound in bond yields, we have lowered our year-end forward P/E estimate for the S&P 500 to 18.6 times from 19.8 times, and therefore cut our year-end target to 7,900 from 8,400," Yardeni wrote in a note to clients. The veteran strategist had raised his S&P 500 target to 8,400 from 8,250 in August, when the target marked his personal highest on Wall Street, driven by "excellent" earnings momentum. Yardeni is the second strategist this week to lower his S&P 500 forecast. As the midterm election year draws to a close, analysts are growing increasingly skeptical. Wells Fargo's Ohsung Kwon cut his target to 7,700 from 7,950, saying the decade-long earnings growth cycle will eventually slow and risks in the technology sector are rising. Still, others raised their outlooks this week, including Bank of America's Savita Subramanian and Tallbacken Capital Advisors' Michael Purves, whose 8,500 target is currently the highest on Wall Street. Yardeni still expects "recession-free growth for the economy through the end of this decade." He said his end-of-decade target remains 10,000. He added that his previous year-end forecast of 8,400 is now the S&P 500 target for mid-2027. His 2027 earnings-per-share target of $425 remains unchanged. Market attention is focused on the Federal Reserve's rate decision vote on Wednesday, with most traders expecting a rate hike as Chair Kevin Warsh has vowed to control inflation. In a previous report, Yardeni wrote that "for stocks, the stagflation combination of rising inflation and slowing growth would be particularly tricky."