The Shiller CAPE ratio for the S&P 500 index has reached approximately 41.1, marking its highest level since the peak of the dot-com bubble. This figure places current market valuations in the top 1% of all data points recorded since 1881. For comparison, the long-term average for this metric since the 1880s is approximately 17.
The index has maintained a CAPE ratio above 40 continuously since May 2026. The historical record shows that starting valuations between 30 and 40 have historically correlated with weaker equity returns over the following decade. The all-time record for the ratio remains 44.2, which was recorded in December 1999.
Additionally, the Buffett indicator, which measures the ratio of total US stock market capitalization to GDP, surpassed 237% in September 2026. Market analysts typically view readings above 200% as an indicator of significant overvaluation. Skeptics note that changes in accounting and index composition may influence modern CAPE readings.
