Yardeni Research analysts lifted their S&P 500 (^GSPC) targets for 2024, 2025, and 2026 after former President Donald Trump won his 2024 reelection bid. Yardeni Research president Ed Yardeni joins Julie Hyman and Josh Lipton to discuss why he's more bullish on markets now that Trump will serve a second term in the White House.

"We're seeing an emergence of animal spirits. It's very reminiscent of what we saw during Trump 1.0 when the stock market improved quite significantly when Trump got elected," Yardeni tells Yahoo Finance, adding, "We're just seeing a more pro-business administration coming in, that [will] undoubtedly will cut taxes, not only for corporations but also for individuals ... And in addition to that, a lot of deregulation."

Yardeni says, "We're upping our estimates for what profit margins are going to be doing over the next couple of years. It's going to go higher, and that's leading us to conclude that earnings are going to be stronger than we had thought and drive the market up to probably 7,000 by the end of next year."

He notes, "On the other side, we've got tariffs that could be inflationary [and] could lead to trade wars. But I think to a large extent Trump is playing the art of the deal, trying to get set for pushing a lot of our trading partners to be more accommodating in their relationship and trade less [in a way], kind of leaving us with the short end of the stick. So I think it's a negotiating position to a large extent." Yardeni says he thinks "deportation is going to be handled slowly." Overall, he says, "the pluses way out the minuses."

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This post was written by Naomi Buchanan.