Is the Stock Market Overvalued? 2026 Valuation Dashboard

The Buffett Indicator is a broad measure of stock market valuation that compares the total value of the U.S. stock market with the size of the U.S. economy, as measured by GDP. In simple terms, it asks how expensive all publicly traded U.S. companies are relative to the economic activity supporting them. The ratio tends to rise when stock prices grow faster than the economy and fall when market values lag economic growth. Because factors such as globalization and technological improvements have caused the ratio to trend upward over time, the CMV model evaluates the Buffett Indicator relative to its long-term historical trend rather than against a fixed threshold.

As of June 30, 2026, the estimated value of the U.S. stock market is $78.1 trillion compared with annualized GDP of $32.1 trillion, producing a Buffett Indicator of approximately 244%. This is about 81% above the model’s historical trend line, or 2.6 standard deviations above trend, placing the market firmly in CMV’s Strongly Overvalued range. In other words, U.S. equities are currently valued exceptionally highly relative to the underlying economy and to their own historical relationship with GDP.

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The Price/Earnings (P/E) ratio is a fundamental valuation measure that compares stock prices with the earnings generated by the underlying companies. A higher P/E means investors are paying more for each dollar of corporate earnings, generally reflecting greater expectations for future growth. For long-term market valuation, CMV uses the 10-year P/E, or CAPE ratio, which compares current S&P 500 prices with average earnings over the previous ten years. Using a decade of earnings smooths out the large swings in profitability caused by recessions and business cycles, making CAPE more useful for evaluating long-term valuation than a conventional P/E based only on recent earnings.

As of June 30, 2026, the S&P 500 CAPE ratio is 39.7, compared with a modern-era average of 20.8. That puts the current ratio 91.2% above its historical average, or 2.3 standard deviations above average, placing the market in CMV’s Strongly Overvalued range. In practical terms, investors are currently paying nearly twice the historically typical price for each dollar of long-term normalized earnings.

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Interest rates can have a significant impact on stock market valuations because they affect both corporate profits and the alternatives available to investors. Higher rates increase borrowing costs for companies, potentially reducing profits, while also making relatively safe investments such as bonds more attractive compared with stocks. Lower rates generally have the opposite effect, supporting corporate borrowing and pushing investors toward equities in search of higher returns. The CMV Interest Rates model therefore compares the 10-Year Treasury rate with its historical norm while also measuring the S&P 500 relative to its long-term trend, asking whether current stock prices are reasonable given the prevailing interest-rate environment.

As of June 30, 2026, the 10-Year Treasury yield is 4.38%, which is 0.48 standard deviations below its historical norm, while the S&P 500 remains substantially above its long-term trend. Combining the relative positions of interest rates and stock prices produces a model reading of 1.93 standard deviations above normal, placing the market in CMV’s Overvalued range. In other words, today’s interest-rate environment provides some support for elevated equity valuations, but not enough to fully justify current stock prices. The model therefore suggests that stocks are expensive even after accounting for the level of interest rates.

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