The Stock Market Is Closing in on Its Highest Valuation Ever. The Last Time It Got This Expensive, It Crashed.

Major U.S. stock indexes are near record highs, but valuation risk is creeping toward a historic benchmark. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite have all reached record levels this year, and if gains hold, 2026 could be the fourth straight year of double-digit returns. The concern is the S&P 500 Shiller CAPE ratio, a measure of price versus average inflation-adjusted earnings over a decade. The CAPE is around 41, roughly 3 points below its all-time high of 44 reached in late 1999, near the dot-com era’s end.