Yardeni Sees Increased Risk of a Sharp Selloff Due to Iran War

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Yardeni Research 4.8
Financial Media
Ed Yardeni 9.0

Yardeni Sees Increased Risk of a Sharp Selloff Due to Iran War

gold; oil

metals

Still using 6,000 by the end of the year and I'm still using 10,000 by the end of the decade. Sees gold as good diversifier, inversely correlated with stocks short-term. Bull market began when it jumped above $2,000 on geopolitics. It's both store of wealth and speculative asset.

1/20/2026 9:28:32 PM	long term up	61 days later	-16.50%	-16.50%
1/2/2026 9:36:55 PM	medium term up	21 days later	+24.33%	+24.33%
12/23/2025 11:20:27 PM	medium term up	20 days later	+8.96%	+8.96%
12/22/2025 3:05:49 PM	long term sharp up	62 days later	+17.06%	+25.59%
11/12/2025 11:46:28 AM	medium term cautious up	20 days later	+4.56%	+2.28%
11/12/2025 9:22:53 AM	long term sharp up	60 days later	+27.68%	+41.52%

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ndx

Expects 10-15% correction or potential bear market due to oil shock/geopolitical risks. Sees market resilience but significant risk from war. Tech should be bought selectively on dips, implying near-term caution.

3/9/2026 9:00:51 AM	short term down	6 days later	-1.21%	+1.21%
1/2/2026 9:36:55 PM	short term cautious down	7 days later	+1.52%	-0.76%
12/12/2025 10:13:25 PM	short term cautious down	7 days later	+1.57%	-0.79%
12/8/2025 10:28:17 AM	medium term cautious down	20 days later	-0.56%	+0.28%
11/12/2025 9:22:53 AM	short term up	5 days later	-1.96%	-1.96%
11/10/2025 1:58:05 PM	short term up	6 days later	-2.87%	-2.87%
10/27/2025 1:01:15 PM	short term up	6 days later	-0.15%	-0.15%
9/19/2025 1:42:29 AM	short term sharp up	7 days later	-0.60%	-0.91%
9/11/2025 10:44:08 PM	medium term sharp up	20 days later	+3.32%	+4.98%
9/9/2025 5:01:26 PM	medium term up	20 days later	+3.48%	+3.48%
8/25/2025 2:53:09 PM	medium term up	20 days later	+3.27%	+3.27%

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wti

War risk persists until tankers move safely through Strait of Hormuz. Market too quick to sell off on one news cycle, implying underlying upward pressure from conflict. Iran blocking its own exports adds to supply concerns.

3/9/2026 9:00:51 AM	short term sharp up	6 days later	+12.04%	+18.06%

yields

Fed is constrained from cutting rates because war is pushing up energy prices and threatening inflation pickup. Even new Fed chair won't be able to convince anyone to lower rates, implying yields stay higher for longer.

3/9/2026 9:00:51 AM	short term up	6 days later	+2.03%	+2.03%
12/23/2025 11:20:27 PM	medium term up	20 days later	+0.85%	+0.85%
12/8/2025 2:52:48 PM	short term up	6 days later	-0.10%	-0.10%
12/8/2025 10:28:17 AM	short term up	6 days later	-0.10%	-0.10%
11/12/2025 11:46:28 AM	medium term cautious down	20 days later	-1.34%	+0.67%
10/27/2025 1:01:15 PM	medium term cautious down	20 days later	+3.77%	-1.88%

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Introduces Ed Yardeni, who raised probability of market meltdown to 35% for rest of year. Asks if that changes after President's comments.

speaker1
speaker2

The 35% meltdown probability doesn't change. Iran has been at war for 47 years and isn't ready for unconditional surrender. The market is too willing to take one news cycle and sell oil off.

War has its own momentum and logic. I'll turn optimistic when I see tankers go through Strait of Hormuz without getting shot at. Until then, significant risk remains.
speaker2

Conflict could last weeks, not months. Iran is strangling itself by blocking its own oil exports and imports. Ceasefire will come, but not unconditional surrender.

Hard to win a war just by dropping bombs from air; we're not putting boots on ground. Enemy is a terrorist state with subsidiaries.
Asks about bear market and recession scenario despite Yardeni's long-term bullish outlook.

speaker1
speaker2

We're still looking at something like a 10-15% correction. Bear market (20%+) can't be ruled out. Oil shocks tend to cause recessions and bear markets.

Market showed resilience Sunday night despite oil spike. Still a lot of buying on dips and wishful thinking. Not the 1970s again, but starting to look somewhat like it.
Asks what Yardeni expects Fed to do and where rates are going, given inflation far above target and could rise further.

speaker3
speaker2

Fed is between Iran and a hard place. War is pushing up energy and gasoline prices, threatening inflation pickup. Fed can't do much. Even a new Fed chair won't be able to convince anyone to lower rates.

Labor market looks weak, but inflation from war overrides that. Fertilizer for planting season comes through the strait, adding to inflation concerns.
Notes software ETF flipped from +7% to -2% after President's speech. Asks if fog of war pushes us back towards tech for safety.

speaker1
speaker2

Back to pandemic-like environment where Magnificent 7 did well due to moats. AI has forced them into an arms race. Tech must be done selectively. Corrections and bear markets are buying opportunities.

Recommended underweighting Magnificent 7 in December. When people talk about 'catching a knife,' it's usually time to buy.
Asks about gold selling off when it should be a hedge. Asks if rally is done and if it's now speculative rather than store of wealth.

speaker3
speaker2

Gold is both store of wealth and speculative. Still using $6,000 by end of year and $10,000 by end of decade.

Jump above $2,000 was beginning of bull market on geopolitics (US/Europe freezing Russian central bank assets). On charts, S&P 500 and gold are inversely correlated short-term (good diversifier) but have same long-term trend.
Asks if gold is still the hedge for the market now, and what other good diversifier exists given bonds haven't worked.

speaker1
speaker2

There isn't a lot of good diversification, so you're forced to grin and bear it. Still a long-term bull market. Still using 7700 in S&P by year-end and 10000 by decade-end. Not giving up on roaring 2020s scenario.

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