The Stock Market Is Closing in on Its Highest Valuation Ever.
The Last Time It Got This Expensive, It Crashed
The stock market is hitting record levels on all fronts. The S&P 500 (SNPINDEX: ^GSPC), Dow Jones Industrial Average (DJINDICES: ^DJI), and Nasdaq Composite (NASDAQINDEX: ^IXIC) have all hit record highs this year, extending a bull market that’s been nearly four years in the making. If these gains hold, 2026 will mark the fourth consecutive year of double-digit returns, extending one of the strongest multi-year runs in decades.
That’s a record worth celebrating. And yet there’s another record the market is approaching that Wall Street might not be so eager to break. The CAPE ratio is closing in on the dot-com era record That record is the S&P 500’s Shiller CAPE ratio, a measure of how expensive the stock market is relative to its earnings.