The S&P 500 Shiller Cyclically Adjusted Price-to-Earnings ratio has remained consistently above 40 since May, marking only the second time in history it has stayed above that threshold. The first occurrence was in January 1999, which preceded the dot-com bear market that began in March 2000. The ratio is used to gauge whether the index is overvalued, and historically stock prices have tended to fall in the years following peaks. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have surged by 6%, 9%, and 5% respectively since late July, but the market is becoming increasingly concentrated in tech, with chip stocks making up roughly 14% of the S&P 500.
