Ed Yardeni Rebuts AI Crisis Scenario as Ares Shares Fall Nearly 7%
Ares Management shares dropped 6.97% after software sector slid nearly 5% on fears of an AI-triggered economic collapse posited for 2028 by Citrini Research. Ed Yardeni countered that AI will augment productivity, maintaining his S&P 500 target of 10,000 and supporting long-term equity gains.
1. Shares Plummet on AI Fear
On Monday, shares of Ares Management fell 6.97% following a broader 4.75% drop in software stocks tracked by the iShares Tech-Expanded Software Sector ETF. Private equity peers Blackstone and KKR also fell between 6% and 9%, reflecting investor concern over a potential AI-driven economic downturn.
2. Citrini's 2028 Crisis Scenario
The hypothetical 2028 crisis scenario envisioned AI agents rapidly replacing white-collar workers, triggering a feedback loop of job cuts, margin pressures and declining consumer spending. That model projected unemployment above 10% and a nearly 40% drop in the S&P 500 from its October 2026 highs.
3. Yardeni's Rebuttal and Bullish Outlook
Veteran strategist Ed Yardeni dismissed the collapse narrative, asserting AI will augment productivity rather than eliminate workers. He maintained an S&P 500 target of 10,000 by 2030, highlighting AI’s role in cost reduction, output growth and the creation of new business models.