Wall Street Bull Warns of Possible Flash Crash

​Ed Yardeni, one of Wall Street’s most optimistic voices, is now sounding the alarm. The veteran market strategist has raised the odds of a U.S. recession and warns that the recent stock market selloff could turn into a flash crash.

For months, investors rode a post-election rally fueled by tax cuts and deregulation promises. But now, with Trump’s tariff policies rattling markets and concerns about a slowing economy mounting, some experts fear that a sudden and sharp market drop—similar to those seen in 1962 and 1987—might be on the horizon.

Why the Market Is Suddenly on Edge
The stock market is coming off a brutal week, with major indices losing over 3 percent, erasing much of the gains made since the election. The S&P 500, which hit a record high in February, is now down nearly 10 percent from its peak.

Yardeni believes the biggest threat is Trump’s renewed trade war, which he calls “Tariff Turmoil 2.0.” The administration insists that tariffs will help bring jobs back to the U.S., but many on Wall Street argue that the uncertainty is causing businesses to freeze investments and rethink hiring plans.

Adding to the anxiety, Federal Reserve Chair Jerome Powell has made it clear that rate cuts aren’t coming soon, leaving investors without the usual safety net of monetary easing.

A Flash Crash Without a Recession?
Yardeni still believes in the resilience of the economy, but he admits that a short-term panic event is possible. He raised his estimate for a U.S. recession and bear market from 20 percent to 35 percent, citing rising stagflation fears—a combination of slowing growth and persistent inflation.

Despite these risks, Yardeni remains mostly optimistic and sees a 65 percent chance that the bull market continues through 2025. Over the long term, he still believes in his “Roaring 20s” thesis, predicting that tech-driven productivity will drive stocks higher into the 2030s, as long as trade tensions don’t escalate further.

What Should Investors Do Now?
While warning of short-term turbulence, Yardeni sees buying opportunities emerging in sectors that have been hardest hit. He points to technology, energy, banking, and industrial stocks, where corporate insiders have been quietly increasing their positions.

Still, with the VIX volatility index spiking 10 percent, investors should brace for more choppy trading ahead. Without a Trump policy shift or a Fed intervention, stock market bulls will need to rely on strong corporate earnings and economic resilience to push prices higher again.

For now, Yardeni’s message is clear: Stay cautious, but don’t panic—yet.







​