Stock Market Valuations Hit Record Highs Amid Historic Volatility
Warren Buffett's preferred valuation metric signals the most expensive stock market in history, following a turbulent first half of 2025. The S&P 500's 10.5% April plunge—its fifth-worst two-day decline since 1950—gave way to a blistering three-month rally that pushed indices to record highs. Growth stocks bore the brunt early, with the Nasdaq entering bear market territory and the Dow sliding into correction.
Trade policy shocks under President TRUMP proved transient as equities staged a dramatic recovery. The Nasdaq Composite and S&P 500 now trade at unprecedented multiples, raising concerns about sustainability. Historical patterns suggest such extended valuations typically precede periods of market contraction, though timing remains uncertain.
