Veteran market strategist Ed Yardeni believes that the bull case for a “Roaring 2020s” market narrative may be regaining traction. In a note to clients Thursday, Yardeni pointed to a string of equity market gains as evidence that investor sentiment is beginning to stabilize, despite ongoing macroeconomic headwinds and heightened policy uncertainty.
His comments follow a three-day rally in major U.S. equity indexes, signaling a potential reversal of the correction that began earlier this month. The S&P 500, which had declined by as much as 12% since April 2 following the Trump administration’s announcement of broad-based tariff hikes, has pared those losses. As of Thursday’s close, the index was down approximately 3% from its early April high.
Market volatility has moderated notably in recent sessions. Contributing to the improved tone was a shift in rhetoric from President Trump, who softened his stance toward Federal Reserve Chair Jerome Powell and appeared to ease tensions with China on the trade front. Yardeni noted that April 8 likely marked the bottom of the recent market pullback, just ahead of Trump’s decision to delay implementation of the new tariffs for 90 days to allow for additional trade negotiations.
While political volatility and policy shifts continue to weigh on market confidence, the temporary pause in escalation has provided relief to equities, fixed income markets, and the U.S. dollar. According to Yardeni, the recent retreat in bearish sentiment may have influenced the administration’s approach.
“I believe the extreme pessimism in the market began to resonate within the White House,” Yardeni said in an interview with CNBC. “Between pressure from equity investors and concerns in the bond market, it seems the administration realized that an overly aggressive stance could invite a significant market backlash.”
Yardeni referred to both “stock vigilantes” and “bond vigilantes” as having played a role in nudging policymakers away from a more hardline approach. “It appears the White House blinked,” he said, adding that the market’s ability to push back against political risk remains a key check on policy overreach.
Still, Yardeni cautioned that the tariff standoff is far from resolved. He emphasized that progress on trade negotiations will be critical if the current rally is to be sustained. Without concrete agreements in place, investor optimism may prove fragile.
Meanwhile, a growing number of corporate leaders are voicing concern over the broader economic outlook. This caution has become more visible during the current earnings season, as companies across sectors lower guidance and acknowledge weakening demand trends.
Southwest Airlines, for example, has withdrawn full-year guidance, citing shifting travel dynamics. CEO Bob Jordan acknowledged that the year began on solid footing, particularly for leisure travel, but noted a deterioration in booking trends as the quarter progressed. “We’ve seen continued softness in second-quarter demand,” Jordan said on Wednesday’s earnings call.
Similarly, Alaska Air and recruitment firm PageGroup have either pulled forward guidance or held off on issuing new forecasts altogether, a move that reflects increased uncertainty across consumer and business sectors.
In the restaurant space, Chipotle’s Chief Operating Officer Scott Boatwright addressed the effects of economic anxiety on consumer behavior. During the company’s earnings call Wednesday, Boatwright highlighted that restaurant foot traffic is being affected by cost-conscious decisions. “Our visitation study shows consumers are reducing restaurant visits primarily due to financial concerns,” he said. “There’s a noticeable shift in sentiment driven by economic unease.”
These cautionary signals underscore the fragile footing of the current equity rebound. While the near-term sentiment reversal has been notable, sustained momentum will likely require both geopolitical de-escalation and concrete economic policy outcomes.
Yardeni’s broader thesis of a “Roaring 2020s” market environment hinges on the belief that underlying economic fundamentals remain intact and capable of supporting strong growth if policy uncertainty recedes. The term, which he has used in prior commentary, draws from the post-pandemic recovery narrative of productivity gains, innovation-led growth, and expansionary capital spending cycles.
However, that optimistic scenario has faced repeated interruptions this year. The abrupt imposition of tariffs and erratic policy messaging from the White House have introduced downside risks that investors are still working to fully price in.
Yardeni’s view remains that if trade tensions abate and macro policy turns more supportive, the U.S. market could resume a growth trajectory reminiscent of earlier post-pandemic periods. “There is still a path forward for the Roaring 2020s,” he said, “but it depends on the political willingness to reduce uncertainty and foster a stable economic environment.”
He also flagged that the bond market’s reaction to recent developments should not be overlooked. Treasury yields fell sharply amid the initial market turmoil, reflecting a flight to safety. But in recent days, that trend has begun to reverse, as fixed income markets respond to improving risk appetite and declining volatility. The 10-year Treasury yield has climbed off recent lows, suggesting investors are reassessing the near-term growth and inflation outlook.
For wealth advisors and RIAs, the current environment presents both challenges and opportunities. On one hand, the resurgence of volatility and policy-related uncertainty complicates asset allocation decisions and may increase client anxiety. On the other, any shift toward more constructive trade dialogue and policy consistency could bolster risk assets and reopen positioning in sectors that were oversold during the correction.
The caution expressed by corporate leaders in earnings calls serves as a valuable reminder that macro indicators often lag the real-time insights of executives on the ground. Advisors may want to monitor not just top-line earnings data, but also commentary on demand elasticity, capital expenditure plans, and labor market dynamics, which offer a forward-looking window into the economy’s underlying health.
In particular, discretionary spending patterns and guidance from consumer-facing firms will be key barometers. The data points shared by Southwest Airlines and Chipotle suggest that household behavior is shifting in response to economic messaging and perceived policy risk, a factor that may influence equity sector performance in the coming months.
Yardeni’s takeaway for advisors is that markets remain highly sensitive to policy tone and trajectory. While a path back to the “Roaring 2020s” narrative is not off the table, it is contingent on more disciplined policy execution and sustained progress in global trade negotiations. For now, the market may have priced in a reprieve—but not a resolution.
