The S&P 500 CAPE ratio has climbed to 41.1, its highest level since the dot-com bubble, with the long-term historical average since the 1880s sitting around 17. This reading places the S&P 500 in the 99th percentile of all historical valuations over 145 years, the all-time record being 44.2 set in December 1999 just before the dot-com crash. The Buffett indicator, which compares total US stock market capitalization to GDP, exceeded 237% in September 2026, with readings above 200% generally considered to reflect significant overvaluation. Historical data consistently shows that starting valuations above 30 to 40 have correlated closely with weak equity returns over the following decade.
Source: Read the original article
