Get Ready for a “Flash Crash” in the Stock Market, Says Leading Analyst

With the selloff in U.S. equities accelerating, investors should prepare themselves for a potential “flash crash” in the stock market, says Ed Yardeni, a leading analyst and president of Yardeni Research.

Yardeni, a Wall Street veteran who specializes in market and stock research, says he himself is starting to get “nervous” about the ongoing selloff in the U.S. and that investors might want to prepare themselves for the possibility of a major crash.

“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. “And we’re wondering whether Trump Tariff Turmoil 2.0 might trigger a rare kind of flash crash unaccompanied by a recession,” he added, referring to the type of market crash that last occurred in 1987 amid an investor panic.

Lowered Forecast

Yardeni, who is known for typically being optimistic and bullish on the market, wrote that stocks and the American economy are getting stress-tested by Trump’s ongoing tariff turmoil. As such, he has raised his expectations for a recession and bear market this year to 35% from 20% previously.

“We are still betting on the resilience of consumers and the economy. However, Trump Turmoil 2.0 is significantly testing the resilience of both,” wrote Yardeni, adding that expectations for a return of stagflation appear to be growing. Stagflation is when inflation rises in an environment of stagnant economic growth.

Yardeni did end his note to clients by stating that “the selloff could provide buying opportunities, especially in overvalued names that are now less so.”

Is the Vanguard S&P 500 ETF a Buy?

The Vanguard S&P 500 ETF (VOO), which tracks the movements of the benchmark U.S. stock index, has a consensus Moderate Buy rating among 505 Wall Street analysts. That rating is based on 413 Buy, 86 Hold, and six Sell recommendations made in the last three months. The average VOO price target of $639.71 implies 23.26% upside from current levels.