Ed Yardeni, a long-term bull on Wall Street, said that the 'volatility' in the US stock market may continue until the election, and it is expected to climb back to historical highs afterwards. According to Yardeni, whether the market can return to historical highs depends in part on the results of the US election, and a political stalemate is the best scenario for the market.
Ed Yardeni, the president of Yardeni Research, a long-term bull on Wall Street, recently said that the 'volatility' in the US stock market may continue until the election, and it is expected to climb back to historical highs afterwards.
"We are seeing significant volatility in the current market. I believe the volatility may continue until the election, and afterwards the stock market will reach new historical highs," Yardeni said in an interview with the media on Wednesday.
In early August, the S&P 500 index fell 3% in a historic market crash, marking the largest single-day decline since 2022.
The market has experienced volatility again this week, with the three major US stock indices experiencing the largest decline since August due to the sharp drop in Nvidia's stock price and concerns about a slowdown in the economy due to weak manufacturing data. On Wednesday, the three major indices closed mixed, with the S&P and Nasdaq falling for two consecutive days.
The US election is expected to result in a political stalemate.
Yardeni stated that whether the market can return to historical highs depends in part on the results of the US election, and a political stalemate is the best scenario for the market.
"If either the Democrats or Republicans win big, I don't think the market would expect that scenario," Yardeni said. "I think the market prefers a political stalemate."
Political deadlock in Congress often leads to delayed legislative action, which is favored by the market because it reduces uncertainty and the need to deal with regulatory surprises.
According to data from LPL Financial, historical observations show that the S&P 500 index tends to rise during periods of congressional divided or Republican-controlled Congress with a Democratic president.
"I think there will ultimately be a political deadlock," Adenyi said.
"If that's the case, then I think the market will go up because despite tight monetary policies, geopolitical and domestic political pressures in recent years, the US economy has still performed well," he added.
Adenyi previously predicted that by the end of 2025, the S&P 500 index could reach 6000 points, and by the end of 2030, it could rebound to 8000 points.
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