Strategist Ed Yardeni says stocks can keep rising without a recession

In short: Market strategist Edward Yardeni says the U.S. economy can avoid a recession for the rest of the decade, which could keep company profits rising and support higher stock prices.

What's going on

Edward Yardeni, a long time stock market strategist, says his main outlook is still what he calls the “Roaring 2020s.” In his latest view, he puts an 80% chance on that base case. The big idea is simple, if the economy keeps growing, the stock market has room to keep moving up.

A key part of his argument is corporate earnings, which is a company’s profit. Yardeni says profits are the main fuel for stock prices, like paychecks are the fuel for a household budget. He believes the “earnings story” is still intact, meaning profits can keep rising even if stocks already look expensive.

Yardeni also points to artificial intelligence as a reason businesses may keep investing and getting more done with the same workers. This is often called “productivity” (how much work gets done per hour). He argues that more spending by companies on new tools and equipment, including AI, could help keep growth going.

He adds that expected Federal Reserve rate cuts could also help. Rate cuts can make borrowing cheaper, which can encourage spending by consumers and businesses.

In May 2026, Yardeni raised his year end target for the S&P 500 to 8,250 from 7,700. The S&P 500 is a widely followed list of 500 large U.S. companies, used as a simple scoreboard for the stock market. He also repeated his 10,000 target by the end of 2029.

What to watch

Yardeni says this will not be a smooth climb, and he has used the word “meltup” to describe a fast rise that can reverse. He also assigns about a 20% chance to a bad outcome, so investors will be watching for any signs of a recession or weakening profits.

Source: NYTimes