Shiller P/E ratio nears dot-com bubble peak

The US stock market's valuation has reached an extreme level, with the Shiller Cyclically Adjusted Price-to-Earnings (CAPE) ratio hitting its second-highest reading of all time. This level is now only slightly behind the peak recorded during the dot-com bubble of the late 1990s and early 2000s. The metric, which smooths out earnings over ten years, signals that stocks are historically expensive, raising concerns about future returns and market stability. This development follows the recent record high in the broader Warren Buffett Indicator, which measures total market cap against GDP.