Is US stock market extremely overvalued? What the Shiller CAPE says about U.S. stock valuations today and what elevated CAPE levels have meant historically

U.S. stock market is flashing a major warning signal in January 2026. The Shiller CAPE ratio has surged to 39.85, a level seen only twice in 150 years. This metric, which tracks inflation-adjusted earnings over a decade, is now 135% above its historical average. Experts warn that extreme valuations often precede a "lost decade" of flat or negative returns for investors.