The Economic Times

Could todays AI-driven S&P 500 rally end like the 1929 crash or the dot-com bubble after CAPE hits 40? What the Shiller CAPE ratio signals amid rising Wall Street bubble fears

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.