Shiller CAPE Tops 40 for Only Second Time in 145 Years

··US
3▲0 ▼0Impact / 5
Summary · why it matters

The Shiller CAPE ratio has climbed above 40 for just the second time in modern stock market history, a valuation warning last seen during the dot-com era of 1999 and 2000. The cyclically adjusted price-to-earnings ratio compares the S&P 500's price with the inflation-adjusted earnings of its component companies averaged over the past 10 years, and its historical average is about 17. The reading comes after the Dow Jones Industrial Average rose 15% from its March low, the S&P 500 gained 22%, and the Nasdaq Composite climbed 30%. Yale economist Robert Shiller, who created the metric, has found that when the CAPE is above 30, returns over the following decade tend to disappoint on average, though the gauge is better at setting long-term expectations than timing market turns. An investor who bought at the March 24, 2000 peak of the dot-com bubble would still have seen the S&P 500's price level rise 397% through Sept. 10, 2026, before dividends, turning $1,000 into nearly $5,000.

Impact on assets 1

Artificial Intelligence▲ · 1 stocks
© 2026 MarketIVNews