Wall Street veteran: The S&P 500 can still rise another 11% this year and will push past the "10,000-point mark" by the end of 2029!

Caixin News May 11 (Editor Huang Junzhi) Wall Street veteran and founder of investment advisory firm Yardeni Research, Ed Yardeni, has been advocating that the U.S. stock market will once again usher in the “Roaring Twenties,” and with recent earnings-driven market surges, he is even more optimistic about this year’s stock market outlook.

On Sunday, this seasoned market expert raised his year-end target for the S&P 500 index from 7,700 points to 8,250 points, making him one of the most optimistic top forecasters on Wall Street. Based on last Friday’s closing price, this target implies the index could rise another 11.5%. So far this year, the S&P 500 has gained nearly 8%.

Yardeni’s forecast is the highest among major Wall Street firms: Oppenheimer (8,100 points), Deutsche Bank (8,000 points), Morgan Stanley (7,800 points), Citigroup (7,700), JPMorgan Chase (7,600), and Goldman Sachs (7,600).

Yardeni pointed out that he is optimistic about corporate earnings prospects, and even though he has raised his expectations, the optimism reflected in the U.S. stock market remains higher than his.

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In a report, he stated: “We have never seen such a rapid rise in market-wide earnings expectations for the current and upcoming years as in recent months. As a result, the stock market has experienced a profit-driven surge.”

Yardeni now expects that this year, large-cap companies will earn $330 per share, up from his previous forecast of $310, and that earnings per share in 2027 will reach $375, up from the previous estimate of $350.

Similarly, he has raised his forecasts for the S&P 500’s earnings per share in 2026 and 2027 by $100, reaching $2,200 and $2,300, respectively, aligning with current general expectations.

“Our core assumption is that the economy will remain resilient, and so will earnings,” he added.

Yardeni also mentioned that the U.S. economy has not only recovered quickly from the COVID-19 pandemic but has also withstood supply shocks from the Russia-Ukraine war, aggressive Federal Reserve rate hikes, and the trade war initiated by President Donald Trump. He increased the probability of a “Roaring Twenties” reemerging from 2021-2030 from 60% to 80%.

Throughout the 1920s, the stock market’s gains far outpaced the growth of the real economy. Against the backdrop of a 50% increase in GNP, the Dow Jones Industrial Average rose about threefold.

Yardeni also added that, any crash would present a buying opportunity because it would not trigger a recession or bear market, and he still considers the likelihood of a recession to be only 20%.

Finally, Yardeni also acknowledged the risk of renewed conflicts in the Middle East and the potential resulting stagflation, which could force central banks worldwide to raise interest rates and push bond market participants to drive yields higher.

“However, for now, we still stick to our target of the S&P 500 reaching 10,000 points by the end of 2029,” he wrote: “and this target could be achieved earlier.”