Chaos in markets sparked a lot of bearish prognostications in the first half, but investors have pushed through, and stocks look like they’re back in “meltup mode.”
That’s the view of Ed Yardeni, a longtime forecaster and the president of Yardeni Research. His “melt-up” thesis says the stock market embarked on a 1990s-style bull run starting in 2024, a stellar but ultimately unsustainable stock rally similar to what markets saw at the height of the dot-com bubble.
To Yardeni, the S&P 500 reaching a new record last week confirms that the formation of a speculative bubble is one of the biggest risks to investors at the moment.
Yardeni says he anticipates the S&P 500 reaching 6,500 by the end of the year, a gain of about 5% from levels on Monday. However, by the end of the decade, Yardeni’s meltup thesis sees the benchmark index rising to 10,000, representing a 60% gain.
“So far, the current bull market looks like a normal one, with the potential to match the returns of some of the best bull markets since the mid-1960s,” Yardeni said.
The upward climb in stocks is partly due to the continued strength of the US economy, the market vet told CNBC on Friday. While some economic data—like retail sales—has come in weaker-than-expected in recent months, that has largely reflected temporary uncertainties like tariffs.
Stocks rallied to records last week on a handful of catalysts. Investors cheered Trump’s announcement that the US and China had agreed to a framework trade agreement, and the market continued to rise to fresh records on Monday as investors digested further progress. Canada on Monday said it would cancel a digital services tax that had caused Trump to threaten to end trade talks.
“Clearly, trade isn’t a done issue yet, but I think will be by the end of the summer,” Yardeni said. “You put it all together and I think it’s a pretty solid economy, pretty solid stock market,” he later added.
Forecasters on Wall Street have turned more bullish on stocks since Trump paused his sweeping tariff agenda in April and struck a handful of framework agreements with some of America’s top trading partners.
