S&P 500 Shiller CAPE Holds Above 40 for Only 2nd Time Since 1870s
Updated
Updated · The Motley Fool · Aug 19
S&P 500 Shiller CAPE Holds Above 40 for Only 2nd Time Since 1870s
3 articles · Updated · The Motley Fool · Aug 19
Summary
Above 40 since May, the S&P 500’s Shiller CAPE ratio has entered only its second sustained stretch at that level, even as the S&P 500 and Dow hit fresh August records.
That reading matters because CAPE has exceeded 30 only a handful of times since the 1870s, including before the Great Depression, the 2021-22 bear market and the 1999 dot-com peak near 44.
History does not guarantee a 2026 crash, but extreme valuations have typically preceded weaker returns and sharper pullbacks once stock prices outrun fundamentals.
The dot-com bust shows both risks and limits of the signal: the S&P 500 lost nearly 50% and the Nasdaq nearly 80%, yet the S&P 500 has returned more than 700% since March 2000.