Yardeni on Cutting His S&P Outlook, Fed, Oil Prices

• S&P 500 year-end target cut to 7,900 from 8,400, with the previous target now expected by mid-next year.
• Key concerns include escalating geopolitical tensions in the Middle East, leading to higher oil prices and potential spillover inflation.
• Anticipates one or two more Fed rate hikes this year and highlights risks from the unwinding of the yen carry trade, which could impact global bond markets.

Edward Yardeni, President of Yardeni Research, has cut his year-end S&P 500 target to 7,900 from 8,400, citing geopolitical developments (Middle East conflict, higher oil prices), potential for more Fed rate hikes, and concerns about the unwinding of the yen carry trade in Japan. He believes the earnings outlook is strong, but valuation multiples are being pressured by these macro factors and a delayed AI story.