The S&P 500’s Shiller CAPE ratio has climbed to about 41, leaving it just 3 points below its record near 44 and signaling elevated overvaluation risk.
That reading stands far above the metric’s roughly 17 average over 155 years, making this only the second distinct period the CAPE has moved above 40.
The last peak came in late 1999 before the dot-com crash, when stock prices had detached sharply from fundamentals and many richly valued companies later failed.
Today’s rally differs in that leaders such as Nvidia are large and profitable, but record highs across the S&P 500, Dow and Nasdaq still leave little room for earnings disappointments.
With the CAPE ratio flashing 1999 warning signs, is the AI-driven stock rally a genuine economic revolution or a devastating bubble waiting to burst?
If mega-cap tech earnings fail to meet astronomical expectations, what hidden triggers could turn today's historic bull market into tomorrow's financial crisis?