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2h ago

S&P 500 Looks Expensive on 19 of 20 Metrics as Powell Calls Stocks ‘Highly Valued’

Bank of America frames the lofty readings as a possible “new normal” for a less levered, more profitable index.

The Wall street sign hangs outside the New York Stock Exchange (NYSE) building on Tuesday following Monday’s broad sell off in New York City, U.S., March 11, 2025. REUTERS/Shannon Stapleton/File Photo
Jerome Powell, chairman of the US Federal Reserve, speaks with an attendee during a Greater Providence Chamber of Commerce 2025 Economic Outlook luncheon in Warwick, Rhode Island, US, on Tuesday, Sept. 23, 2025.
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Overview

  • Bank of America says 19 of 20 valuation gauges show the S&P 500 as statistically expensive, with four at record highs.
  • Record readings include Price-to-Book at 5.37x and Market Cap-to-GDP at 1.8x, alongside peaks in Price-to-Operating-Cash-Flow and Enterprise-Value-to-Sales.
  • Fed Chair Jerome Powell said equity prices are “fairly highly valued,” and the S&P 500 slipped 0.55% Tuesday and 0.28% Wednesday.
  • The index has rallied more than 30% since early April and went 108 sessions without a 2% pullback.
  • The forward P/E near 22.9 has been surpassed only during the dot‑com era and the pandemic, while BofA argues an earnings boom could help the market grow into current multiples.