Stock Markets June 4, 2026 06:32 AM

Yardeni Says Any S&P 500 Pullback Should Be Bought, Keeps 8,250 Year-End Target

Research shop cites strong forward earnings and tech-led rally but warns of monetary policy, oil and IPO risks

By Leila Farooq LCO SPCX

Yardeni Research urged investors to treat short-term retreats in the S&P 500 as buying opportunities and reiterated a year-end target of 8,250. The firm pointed to a powerful rebound led by Information Technology and hefty gains in forward earnings, while flagging potential near-term headwinds from shifting Fed policy, rising short-term Treasury yields, oil-price risks and possible volatility linked to the SpaceX IPO.

Yardeni Says Any S&P 500 Pullback Should Be Bought, Keeps 8,250 Year-End Target
LCO SPCX

Key Points

  • S&P 500 has risen 19.1% since bottoming on March 30, with the Information Technology sector up 44.5% fueled by what Yardeni labels Fabulous Earnings Momentum (FEMO).
  • Yardeni maintains a year-end S&P 500 target of 8,250 and characterizes any short-term pullback as a buying opportunity.
  • S&P 500 forward earnings increased 26.6% year over year through May, a reading the firm calls among the strongest outside post-recession recoveries. Impacted sectors include Technology and Energy.

Yardeni Research said investors should view any near-term pullback in the S&P 500 as a buying opportunity and kept its year-end target for the index at 8,250, while also identifying a set of risks that could weigh on markets over the coming weeks.

The firm noted the S&P 500 has climbed 19.1% since it hit a low on March 30, with the Information Technology sector powering much of the advance. Yardeni highlighted a 44.5% surge in the tech sector, attributing that strength to what it calls Fabulous Earnings Momentum, or FEMO, during the first-quarter earnings season.

Yardeni also pointed to unusually strong profit expectations: S&P 500 forward earnings were up 26.6% year over year through May. The research shop described that gain as among the strongest readings on record outside of periods following recessions.

Despite this constructive medium-term outlook, Yardeni flagged several short-term concerns. The firm expects the Federal Open Market Committee to shift from an easing stance to a tightening bias at its next meeting, and it anticipates a 25-basis-point rate hike in July - a move it said could come ahead of broader market expectations for a later increase.

Yardeni noted that the two-year U.S. Treasury yield has risen to 4.08%, now sitting above the current federal funds rate range of 3.50% to 3.75%. The research group interpreted that inversion as an indication that tighter policy is anticipated.

Energy-market risks were also highlighted. Yardeni referenced warnings from Exxon and Chevron executives about the possibility of oil climbing to as high as $150 a barrel, citing this as a source of downside volatility for financial markets.

The firm additionally called out the potential for market turbulence surrounding the SpaceX IPO as another factor that could inject short-term volatility into equities.

"We view any pullback as a buying opportunity and maintain our 8,250 target for the S&P 500 by year-end," Yardeni wrote. The firm added that its two preferred bull/bear sentiment ratios remain relatively subdued, suggesting that any correction in the market should be modest.


For investors and market watchers, Yardeni's note combines a bullish medium-term forecast founded on strong earnings momentum with cautionary signals tied to monetary policy expectations, rising short-term yields and specific event risks in oil markets and a major IPO.

Risks

  • Monetary policy shift: Yardeni expects the FOMC to move from easing to a tightening bias and forecasts a 25-basis-point hike in July, which could pressure interest-rate sensitive sectors such as financials and real estate.
  • Rising short-term yields: The two-year U.S. Treasury yield has climbed to 4.08%, above the federal funds range of 3.50%-3.75%, signaling anticipated tighter policy and potential volatility for equities and bond-sensitive sectors.
  • Commodity and event-specific risks: Executives at Exxon and Chevron warned oil could spike to $150 a barrel, posing a risk to market stability and particularly affecting the Energy sector; Yardeni also noted possible volatility around the SpaceX IPO.

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