Wall Street veteran and Yardeni Research President Ed Yardeni said he has turned more cautious on the artificial intelligence trade, arguing that markets are already showing signs of "AI fatigue." According to Morningstar, Yardeni said it is difficult to identify the ultimate winners and losers at this stage, so investors should avoid chasing individual AI names directly. For those seeking AI exposure, he said diversified vehicles such as Nasdaq-100 index funds are a better fit. Yardeni added that he prefers sectors likely to benefit from AI adoption rather than companies whose appeal rests only on AI technology itself. He specifically pointed to finance, healthcare, industrials, and energy. He also contrasted the current rally with the dot-com bubble, saying the late-1990s run was driven by FOMO, while today’s market is supported by what he called FEMO, or "fantastic earnings momentum." He cited forward price-to-earnings ratios of about 17 for semiconductors and around 20 for the broader market, both well below 1999 bubble levels. Yardeni said the "Roaring 2020s" still have roughly an 80% chance of continuing as long as the U.S. economy avoids recession.

Ed Yardeni, president of Yardeni Research and a longtime Wall Street bull, said the "Roaring 2020s" rally in U.S. equities still has about an 80% chance of continuing as long as the U.S. economy avoids a recession. He has raised his year-end target for the S&P 500 three times this year, with the latest forecast at 8,400. Yardeni said the current advance in stocks is being driven more by strong earnings momentum than by the kind of FOMO-style multiple expansion seen during the dot-com bubble. At the same time, he warned that a geopolitical shock that sends oil prices sharply higher could lift inflation again and force central banks to resume rate hikes. He also pointed to the U.S. fiscal deficit and persistently rising Treasury yields as key risks. On AI investing, Yardeni said investors should avoid blindly chasing a single technology stock. Instead, he favors sectors that stand to benefit from AI adoption, including financials, healthcare, industrials, and energy. He also argued that holding a portion of gold in a portfolio is a prudent move, citing global central bank buying and a reduction in dollar reserves.

Global sovereign bond markets are going through one of their sharpest selloffs in decades, with long-dated yields rising under pressure from inflation concerns, fiscal expansion and a structural decline in demand from traditional buyers. In the U.S., the 30-year Treasury yield touched 5.33% this week, its highest level since 2007, while comparable yields in France, Germany, the U.K. and Japan also climbed to multi-year highs. According to figures cited by Wallstreetcn and Bloomberg-compiled data, the average yield on a benchmark basket of investment-grade sovereign debt has risen to about 4.5%, the highest since records began in 2015. The report says the move is being driven less by a jump in inflation expectations and more by higher real yields, as investors demand more compensation to hold long-duration debt. On the supply side, heavier issuance by governments and even tech companies is adding pressure, while on the demand side, pensions and other traditional long-bond buyers are becoming less dominant. Strategists and asset managers remain divided on whether the repricing now offers value or whether yields may need to rise further before returns on long-duration bonds become more attractive.

Trump said he wants lower rates but will leave the decision to Fed Chair Kevin Warsh. At the same time, 4% inflation pressures and stronger-than-expected payrolls have pushed market pricing toward unchanged rates and possible hikes.