What History Reveals About a Potential Stock Market Crash in 2026
Yahoo Finance ·
The S&P 500 has delivered strong gains over the past several years. Artificial intelligence remains a dominant investment theme, and stock valuations have climbed well above historical averages. Whenever markets reach these levels, discussions about an impending crash tend to follow -- and with good reason. Indeed, history offers a useful perspective. One of the most widely followed valuation measures is the Shiller P/E CAPE ratio , which compares stock prices to average inflation-adjusted earnings over the previous 10 years. Historically, elevated CAPE ratios have been associated with lower long-term returns and, in some cases, major market corrections. And today, the CAPE ratio remains elevated. That doesn't mean a crash is imminent, though.
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