Financial firms such as Oppenheimer (1), Citigroup (2) and Goldman Sachs (3) have been raising their S&P 500 value predictions for 2026. Now one firm’s optimism has topped them all. Ed Yardeni, president of Yardeni Research, announced his 2026 S&P 500 forecast on Sunday: 8,250. This is up from his previous prediction of 7,700 (4).
Yardeni’s latest target was an 11.5% increase from Friday’s close, with a year-to-date incline of 8% (5).
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“Our key assumption is that the economy will remain resilient, and so will earnings,” Yardeni said in a note (6). “That’s been our mantra since we first started writing about the Roaring 2020s during the summer of 2020.”
Yardeni believes we’re in the Roaring 2020s — but what does that mean?
Since the beginning of the decade, Yardeni has been adamant that the United States is experiencing a second “Roaring Twenties” (7).
The 1920s earned the moniker “Roaring 20s” in the U.S. for several reasons. A major factor was the country’s economic prosperity, with crises marking the beginning and end of the decade. Heading into 1920, America was recovering from several large issues, including World War I (8) and the influenza epidemic (9). However, the country still financially thrived for most of the decade, before the 1929 stock market crash that led to the Great Depression (10).
The 2020s also began with a crisis: the COVID-19 pandemic in early 2020. The U.S. economy has rallied in many ways since then. Issues regarding the pandemic caused the S&P 500 to plunge by 34% — but it recovered after only eight months and actually gained value by the end of 2020 (11).
As in the 1920s, Yardeni believes America will financially flourish in the 2020s. He isn’t worried about the impact of the Iran war on this outlook. The S&P 500 performance dropped after the U.S. and Israel attacked Iran earlier this year, but it had rebounded by mid-April and has continued to grow (12).
“We’ve never seen consensus earnings expectations rise so quickly for the current and coming years as they have in recent months,” Yardeni wrote. “The result has been an earnings-led meltup in the stock market” (13).
What melts up, must melt down
A “melt-up” is a sudden surge in stock market performance, usually unexpected and unsustainable. It’s known to be driven by investor sentiment rather than economic data. With a melt-up, people see stock prices rising and rush to buy shares so they don’t miss out on the opportunity (14).
Yardeni’s explanation of the current market melt-up is that it’s based on corporations’ earnings, not just investor sentiment.
Yardeni announced the firm’s latest S&P 500 prediction on Sunday, March 10. The previous Friday, 89% of S&P 500 companies had reported their Q1 2026 earnings; of those, 84% reported that their earnings per share had exceeded estimates, which is above the 5-year and 10-year averages (15).
This may seem like great news, but there are cons to consider. For instance, the general understanding of a melt-up is that it’s unsustainable.
A prime example of a melt-up is the dot-com bubble from the 1990s and early 2000s. Investors rushed to buy technology stocks, which pushed the Nasdaq Composite index to an all-time high at the time. The speed and money involved in this stock-buying rush were untenable. When the dot-com bubble burst, the Nasdaq lost almost 80% of its value in a little over two years (16).
If we are indeed experiencing a Roaring 2020s, the decade may end with a meltdown — again, remember the great stock market crash of 1929?
How investors can prepare during a melt-up
What if Yardeni — and analysts at these other firms — are right, and the stock market continues to soar in 2026 and the rest of the decade? What does this mean for investors, not just over the next few years, but in the long term?
A good rule of thumb is to avoid emotional investing. This includes buying stocks on a whim during a melt-up and panic-selling stocks during a meltdown. Whether you’re investing for short-term or long-term growth, your portfolio should include stocks that you’ve researched thoroughly, so you understand their financial positions.
You can also diversify your portfolio by buying various types of stocks. Consider purchasing ones from companies in different sectors and sizes, or mixing it up with domestic and international stocks. Diversifying your portfolio, rather than putting all of your eggs in one or two baskets, can help protect your wealth from a potential stock market crash.
Everyone has their own financial situation and level of risk tolerance. Speak with your financial adviser before making any drastic changes to your investment strategy.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Oppenheimer (1); Citigroup (2); Goldman Sachs (3),(16); Yardeni Quick Takes (4),(6); Fortune (5),(13); Yardeni Research (7); Britannica (8),(10); U.S. National Archives (9); IG Canada (11); Yahoo Finance (12); Corporate Finance Institute (14); FactSet (15)
This article originally appeared on Moneywise.com under the title: Ed Yardeni just set the highest S&P 500 target on Wall Street — but warns a meltdown may soon follow
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Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: finance.yahoo.com
