Even Wall Street’s Biggest Bull Is Getting Nervous

November 4 — U.S. stocks have been on a relentless six-month rally, and investor optimism looks unshakable. But for one of Wall Street’s most bullish strategists, this euphoria is now flashing red.

Ed Yardeni, founder of Yardeni Research, warned that excessive bullish sentiment and technical fatigue could trigger a 5% pullback in the S&P 500 by December.

Since April, the index has soared 37%, a surge seen only five times since 1950. Yet investors have largely brushed aside Fed Chair Jerome Powell’s cautious tone on rate cuts. Yardeni cautioned, “It might only take one surprise to knock the market off its highs.”

Investor sentiment metrics agree — the latest Investors Intelligence survey shows a bull-to-bear ratio of 4.27, above the 4.0 threshold historically signaling overconfidence. The AAII’s weekly survey of retail investors echoes this: bullish sentiment has topped its historical average in five of the last seven weeks.

From Perma-Bull to Cautious Voice

Yardeni, once one of Wall Street’s most vocal bulls, had predicted the S&P 500 could hit 7,000 by the end of 2025. But now, with the index trading 13% above its 200-day moving average, he’s signaling concern about overheating momentum.

Similarly, the Nasdaq 100 sits 17% above its 200-day average — its widest gap since July 2024. Yardeni warns such extremes rarely last.

Still, not everyone shares his nerves. Tom Lee of Fundstrat Global Advisors believes the bull run may continue, noting that “markets can stay exuberant for weeks or months before correcting.” Historically, when the S&P 500 gains over 10% in the first ten months, it rises another 4.2% on average in November–December.

So perhaps — the party isn’t over just yet.