Stock Market CAPE Ratio hits 40, a number last seen before the 1929 crash and the 1999 dot-com bubble
Posted By RichC on June 2, 2026
Most investors these days are likely following the herd and enjoying strong returns in their portfolios — much of it due to the weaker dollar vs asset classes in my opinion. That said, it is hard not to be smiling when the market hits new market highs.
BUT … history has taught us (or at least me) that the party doesn’t go on forever and that the more rapid and “exuberant” the rallies, the more rapid and severe the 
decline “could” be. Jonathan Hoenig of The Capitalist Pig shared some comments on Fox Business about the CAPE Ratio and an article with me on X.com, hinting at a statistic that does give pause to the wondering just how long the promise of AI productivity gains will continue?
Synopsis
Stock Market CAPE Ratio hits 40, a rare level last seen before the 1929 crash and the 1999 dot-com bubble burst, raising fresh Wall Street valuation fears. The S&P 500 is trading at extreme overvaluation levels, driven by strong but expensive tech-led gains. Investors are watching stock market crash signals, rising interest rates, and weak sentiment closely. Historical CAPE ratio data suggests lower future returns when valuations stretch this far. Analysts warn that high stock market CAPE ratio conditions often lead to sharp corrections if earnings fail to keep pace with prices.Read more at: LINK
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