Market Overview
The S&P 500 has entered its third year of a bull market as of October 2025, concluding the year with a 78% increase over three years. This bull run has been fueled by optimism in high-growth sectors, particularly artificial intelligence, quantum computing, and weight loss drugs, with key players like Nvidia, IonQ, and Eli Lilly seeing substantial stock price increases.
As of early 2026, the S&P 500 has remained relatively unchanged amid investor concerns regarding the sustainability of AI stock valuations and the pace of interest rate cuts by the Federal Reserve. The Shiller CAPE ratio, which measures stock valuations, recently reported its first decline in nearly a year, indicating that high valuations might be coming down.
Historically, declines in the Shiller CAPE ratio have often led to drops in the S&P 500, suggesting a period of potential declines may be on the horizon. However, it’s crucial for investors to monitor economic reports and growth company performance for clearer market insights in the coming weeks.
