Equities trade at Schiller PE levels last seen in 2001, while Treasury yields hit 20-year highs amid inflation concerns.
U.S. equities closed sharply lower Friday, pushing the Schiller PE ratio to its highest level since the dot-com crash. The metric, which adjusts for inflation, now reflects valuations unseen since 2001, following a week of volatile gains and a late sell-off.
The 30-year Treasury yield reached nearly 20-year highs, driven by persistent inflation fears and rising energy prices. Analysts warn the Federal Reserve may delay rate cuts or even hike further if inflation accelerates. The Russell 2000 led declines, dropping 2.44%, while the Nasdaq fell 1.54%.
Futures pointed lower in pre-market trading Monday, extending losses after Friday’s broad-based retreat. The shift in sentiment follows warnings of overstretched valuations and tightening financial conditions.