Strategist Ed Yardeni, one of the biggest bulls on Wall Street, is coming off the sidelines after the U.S. and China reached a temporary trade truce over the weekend and sparked a major market rally. The president of Yardeni Research raised his year-end target for the S & P 500 back up to 6,500 from 6,000. The new target represents a nearly 11.2% gain for the equity benchmark from Monday's close. Yardeni also altered his recession forecast once again, dialing it down to 25% after previously lowering it to 35% on May 4. The strategist pointed to the S & P 500's sharp recovery seen in the previous session, after optimism flooded back into equities as traders' concerns about a global trade war and an economic recession eased. Yardeni wrote in his Monday note that the S & P 500 was only 5.9% below its record high on Feb. 19, and was exceeding both its 50-day and 200-day moving averages . "Among our main concerns about Trump's Tariff Turmoil was that the drop in stock prices would have a significant negative wealth effect on consumers, especially retired and soon-to-be retiring Baby Boomers, who collectively own about $25 trillion in corporate equities and mutual funds," Yardeni said in a Monday note to clients. "… After [Monday's] stock market rally, the negative wealth effect is probably insignificant." Adding to Yardeni's revived sentiment is the uptick in customs duties , which he said rose at an annualized $195.6 trillion in April and are beginning to boost the federal government's tax receipts. Yardeni also remains optimistic on the strength of the U.S. dollar in comparison to other currencies of emerging market nations. .SPX 1Y mountain S & P 500 performance. Yardeni expects the Federal Reserve will not make an interest rate cut this year given the overall resilience of the U.S. economy. He also noted there were signs of consumer strength during the tariff turmoil and capital spending is ongoing. "I think there's a lot of scary stories of what tariffs would do. And certainly, if the president hadn't postponed the tariffs and basically changed his mind, I think we would have some problems," Yardeni said on CNBC's "Squawk Box." "I think the market's already looking at 2026. … The market has concluded enough of this noise. We're probably going to get signal — and good signal — and that'll be later this year, into 2026," he added. As stock prices plummeted in response to tariffs, Yardeni Research on March 31 lowered its base case S & P 500 year-end target to 6,000 and raised the odds of a recession to 45% from 35%. On March 13, the firm had lowered its best-case S & P 500 target for 2025 to 6,400 from 7,000.
