Yardeni Research reiterated this week that it still expects the S&P 500 to climb to 7,000 by year-end, even as anxiety mounts over what some fear could become an “AI-led Tech Wreck.”

The firm argued that the current wave of pessimism—centered on a potential AI bubble bursting, consumer fatigue, and “cracks in credit markets reminiscent of those during the Great Financial Crisis”—may ultimately prove misplaced. It compared the situation to “a no-show, too, just like the most widely anticipated recession of all time,” which investors braced for over the past several years but never materialized.

Despite the turbulence, Yardeni Research said it continues to assign a “55% subjective probability that the S&P 500 should reach 7000 by the end of this year and 7700 by the end of next year.”

However, the firm acknowledged that the risk backdrop has shifted. It lowered the odds of a meltup from 25% to 15% while “raising the odds of a bearish scenario from 20% to 30%.”

The caution comes after both the S&P 500 and Nasdaq slipped below their 50-day moving averages, leaving them 4% and 6.4% off their late-October highs, respectively. Bitcoin’s sharp 26.8% retreat from its October 6 peak has also unnerved some market watchers, though Yardeni Research believes that crypto and the TQQQ “can and will probably diverge.”

The firm added that short-term sentiment measures have deteriorated, pointing to CNN’s Fear & Greed Index flashing “extreme fear,” a condition that “often sets the stage for a rebound.”

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