What is the current CAPE ratio reading for the S&P 500?

The current reading is the second-highest in 155 years, according to a Motley Fool report.

Does a high CAPE ratio mean the market will crash soon?

No, the CAPE ratio is not a precise timing indicator, but it suggests that future returns may be below average over the long term.

When was the last time the CAPE ratio was at a similar high level?

The last time the ratio was higher was during the dot-com bubble in the late 1990s.

Warning: S&P 500 CAPE Ratio Hits Second-Highest Level in 155 Years

The S&P 500's CAPE ratio has hit its second-highest level in 155 years, according to a Motley Fool report. This valuation metric suggests the market may be overpriced, historically leading to subdued future returns.

June 21, 2026

2 min read

Source: Motley Fool

Key Numbers

current cape ratio

second highest in 155 years

According to a report from Motley Fool, the S&P 500's cyclically adjusted price-to-earnings (CAPE) ratio has reached its second-highest reading in 155 years. Developed by Robert Shiller, this ratio measures market valuation relative to average earnings over a 10-year period.

What is the CAPE Ratio and Why Does It Matter?

The CAPE ratio (Cyclically Adjusted Price-to-Earnings) is a long-term valuation metric that uses real (inflation-adjusted) average earnings over 10 years to smooth out cyclical fluctuations. Historically, high readings indicate that the market may be overvalued, often followed by periods of low returns.

Current Reading

According to the report, the current reading is the second-highest ever, surpassing most historical periods except for the dot-com bubble in the late 1990s. This raises questions about the sustainability of recent gains.

What Does This Mean for Investors?

While the CAPE ratio is not a precise timing indicator, it provides a long-term warning signal. Investors may face below-average returns in the coming years. A balanced investment strategy and avoiding overconcentration in high-valuation stocks is advisable.

Frequently Asked Questions

The CAPE (Cyclically Adjusted Price-to-Earnings) ratio is a valuation measure that uses 10-year average earnings to smooth out cyclical fluctuations; high readings suggest potential overvaluation.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.