Investor enthusiasm over AI’s potential to boost productivity and usher in a new era of growth helped the stock market rebound from 2022’s brutal drop throughout the first half of this year. Even as the Federal Reserve hiked interest rates to fight inflation, the S&P 500 jumped roughly 20% to briefly touch 4600 at the end of July. For Ed Yardeni, the founder of Yardeni Research, the stock market’s surge was expected, but “ahead of schedule”—and that meant a near-term pullback was on the way.
“We concluded that the [S&P 500] index might fall to its 200-day moving average, which is currently around 4200,” the veteran investment strategist, economist, and former Fed official recalled in a Sunday note.
