The Economic Times

Is US stock market extremely overvalued? What the Shiller CAPE says about U.S. stock valuations today and what elevated CAPE levels have meant historically

U.S. stock market is flashing a major warning signal in January 2026. The Shiller CAPE ratio has surged to 39.85, a level seen only twice in 150 years. This metric, which tracks inflation-adjusted earnings over a decade, is now 135% above its historical average. Experts warn that extreme valuations often precede a lost decade of flat or negative returns for investors.