MW One of Wall Street's biggest bulls now says a flash crash can't be ruled out

By Barbara Kollmeyer

Ed Yardeni increases the odds of a U.S. recession

The stock market looks ready to resume selling again after last week's rout. President Donald Trump has said "a little time" may be needed for his tariff plan to start returning wealth to Americans, but Wall Street patience is running razor thin.

"Strong postelection vibes were an important part of the bullish consensus on 2025 for U.S. equities which hasn't panned out," observed RBC Capital Markets' head of U.S. equity strategy research, Lori Calvasina.

Our call of the day flips to one of Wall Street's biggest bears, Yardeni Research president Ed Yardeni, who is getting nervous. His forecast for a 7,000 finish for the index, which he shares with Deutsche Bank, is second only to 7,100 at Oppenheimer.

"We can't rule out the possibility that a bear market started on Feb. 20, the day after the S&P 500 rose to a record high," he wrote in a note to clients on Sunday.

"And we're wondering whether Trump Tariff Turmoil 2.0 might trigger a rare kind of flash crash unaccompanied by a recession," he added on Monday. Those "flash crashes," could be like those seen during 1962 and 1987, which happen fast and reverse just as fast, he said.

"So the selloff could provide buying opportunities, especially in overvalued names that are now less so," Yardeni said.

Read: Here's the level that could be an attractive entry point for stocks, says Morgan Stanley's Mike Wilson

Yardeni said the market and economy is getting stress-tested by Trump turmoil, and he just raised chances of a recession and bear market for stocks to 35%, from 20% over the past three years.

"We are still betting on the resilience of consumers and the economy. However, Trump Turmoil 2.0 is significantly testing the resilience of both," said Yardeni. And given the sharp fall for stocks, he said the market expectations on stagflation only seem to be growing.

Yardeni is predicting a choppy stock market for the first half of this year, and a climb into record territory resuming by the second half. But he now sees a 65% chance (previously 80%) that the bull market remains intact with no correction or bear market in 2025.

Over the longer term, he says his "Roaring 20s" outlook for stocks to extend a bullish run into the 2030s still has a 55% chance of happening, boosted by a resilient economy and tech-driven productivity. But that's contingent on the trade war not worsening.

And Yardeni said his firm is no longer counting on a Fed put - the central bank rushing to the stock market's rescue if needed - given that Chair Jerome Powell indicated last week that the central bank isn't in a hurry to cut interest rates.

So without a Trump put either, stock market bulls need to "bet on the resilience of the economy and earnings," said Yardeni, who adds: "We still think that's a good bet."

As for those buying opportunities in equities that might be starting to show up, Yardeni cited data from Michael Brush - publisher of the stock newsletter Brush Up on Stocks and a columnist for MarketWatch - that insiders have been buying in cyclical areas including energy, technology, banking, and industrials as well as biotechs.

Read: Thinking of buying the stock-market dip? Here's what you should know.

Markets

U.S. stock futures (ES00) (YM00) (NQ00) are dropping and Treasury yields BX:TMUBMUSD10Y BX:TMUBMUSD02Y are also falling. Bitcoin (BTCUSD) is down over 5%.

   Key asset performance                                                Last       5d      1m      YTD     1y 
   S&P 500                                                              5770.2     -3.10%  -4.24%  -1.89%  12.62% 
   Nasdaq Composite                                                     18,196.22  -3.45%  -6.80%  -5.77%  13.12% 
   10-year Treasury                                                     4.299      14.00   -19.90  -27.70  19.70 
   Gold                                                                 2918       0.48%   -0.64%  10.56%  33.30% 
   Oil                                                                  66.6       -2.73%  -8.10%  -7.33%  -14.76% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The buzz

Speaking to Fox News on Sunday, President Trump refused to rule out a recession for the U.S. in 2025.

DoorDash stock $(DASH)$ is climbing on news it will soon join the S&P 500.

Ex-central banker Mark Carney won Canada's premiership in a landslide vote, and he has fighting words for the U.S.

Robinhood Markets shares (HOOD) fell as it agreed to a fine of nearly $30 million with the securities industry's self regulator.

Taiwan Semiconductor Manufacturing $(TSM)$ reported a 39.2% annual rise in revenue for January and February.

Oracle $(ORCL)$ earnings are due after the close.

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The chart

This chart is from Jonathan Krinsky, chief market technician at BTIG, which shows that on average during years following a 20% gain, the market finds a bottom on March 12. Krinsky offers other signals that he thinks are pointing to a "tactical rally into April," such as a six-week losing streak for small caps, seen only four times since 2000. "It's still likely to be choppy, but we think SPX can bounce to 5950-6000 which would represent a 3-4% gain from Friday's close," he said.

Top tickers

These were the top-searched tickers on MarketWatch as of 6 a.m.:

   Ticker  Security name 
   TSLA    Tesla 
   NVDA    Nvidia 
   PLTR    Palantir Technologies 
   TSM     Taiwan Semiconductor Manufacturing 
   GME     GameStop 
   AAPL    Apple 
   AMZN    Amazon.com 
   AMD     Advanced Micro Devices 
   MSTR    MicroStrategy 
   NIO     NIO 

Random reads

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-Barbara Kollmeyer

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March 10, 2025 06:52 ET (10:52 GMT)

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