Ed Yardeni, president of Yardeni Research, raised his year-end target for the S&P 500 to 8,250 in a CNBC interview. Yardeni attributed the upward revision to sustained earnings momentum, which he termed 'fabulous earnings momentum' or FEMO, rather than speculative investor behavior. The strategist emphasized that the depth and liquidity of US capital markets are driving technological advancements and productivity gains, supporting continued economic growth and corporate profit expansion.
Yardeni Cites Earnings Momentum as Primary Market Driver
Yardeni stated that fundamentals, specifically earnings growth, are propelling the S&P 500 to new all-time highs. He contrasted 'FEMO' (fabulous earnings momentum) with 'FOMO' (fear of missing out), asserting that the former is the true catalyst. "I think it's actually the obvious reason, and that is earnings. I've been recently talking about FOMO versus FEMO. FEMO's fabulous earnings momentum. And that's really what's been driving the market, not FOMO, not fear of missing out," Yardeni said.
US Capital Markets Fuel Technology and Productivity Gains
Yardeni discussed the role of US capital markets in fostering innovation and economic resilience. He referenced discussions around 2024 about American exceptionalism, noting that the thesis "kind of fizzled out in 2025." However, he maintained that the availability of capital for innovation continues to drive the technology revolution. "We have amazing capital markets. We have a tremendous amount of capital available for innovation. That's driving the technology revolution. The technology revolution is driving productivity, and productivity is fairy dust. It makes everything better in the economy: better growth, lower inflation, real wages go up, and profits are great," Yardeni stated.
Strategist Dismisses Market Froth Concerns Amid Previous Corrections
Yardeni addressed concerns that the market appears overvalued as the S&P 500 approaches fresh highs. He pointed to previous market downturns as evidence of resilience and opportunity. "We've already had a few crashes. I mean, we had a crash at the beginning of last year. It turned out to be a great buying opportunity. We had a crash in March. It turned out to be a great buying opportunity," he said. Yardeni emphasized that substantial wealth in the US and globally seeks investment in US markets, with earnings growth remaining the primary driver. "So I think there's a tremendous amount of wealth in the US and, on a global basis, that wants to invest in the US. I think earnings are what's driving it all," he concluded.
FAQ
What is Ed Yardeni's new year-end target for the S&P 500?
Ed Yardeni raised his year-end target for the S&P 500 to 8,250 in a CNBC interview.
Why did Ed Yardeni raise his S&P 500 target?
Yardeni attributed the increase to sustained earnings momentum, which he calls 'fabulous earnings momentum' or FEMO, rather than speculative investor behavior. He stated that earnings growth, supported by US capital markets and technological innovation, is the primary driver of the market's ascent.
How does Ed Yardeni view recent market corrections?
Yardeni noted that previous market downturns, including crashes at the beginning of last year and in March, turned out to be buying opportunities. He dismissed concerns that the market is overvalued, emphasizing that earnings growth continues to support the bull market.
