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Elevated S&P 500 Valuations Could Signal Final Stage of AI-Driven Market Rally
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- Elevated S&P 500 Valuations Could Signal Final Stage of AI-Driven Market Rally Fiona Craig Fri, June 19, 2026 at 10:40 PM GMT+7 2 min read ^GSPC Stock chart with green arrow moving up ©Adobe Stock Images.
- According to Higgins, the measure has reached “a level last seen before the dotcom bubble burst.”
- The CAPE ratio has accounted for more than two-thirds of the index’s gains over that period.
Elevated S&P 500 Valuations Could Signal Final Stage of AI-Driven Market Rally Fiona Craig Fri, June 19, 2026 at 10:40 PM GMT+7 2 min read ^GSPC Stock chart with green arrow moving up ©Adobe Stock Images. The sharp rise in U.S. equity valuations may indicate that the artificial intelligence-fueled bull market is entering its most speculative phase, according to Capital Economics.
In a note published Tuesday, Chief Economic Adviser John Higgins highlighted that the S&P 500’s cyclically adjusted price-to-earnings ratio (CAPE) has climbed more than 12 points since the beginning of 2023 and now sits above 40.
According to Higgins, the measure has reached “a level last seen before the dotcom bubble burst.”
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