The S&P 500 Just Did Something Seen Only 1 Other Time Since 1871 — and It's Not Good News for Wall Street

The S&P 500 Shiller CAPE ratio has reached 40 for only the second time in 155 years (first in 1999, now in June 2026). Historically, such elevated valuations have preceded major market downturns, including the dot-com bubble crash and the Great Depression. While current earnings are rising faster than valuations unlike in 1999, investors should focus on high-quality stocks with reasonable valuations and consider building cash reserves for potential market sell-offs.