By most metrics, the U.S. stock market is exorbitantly expensive. The S&P 500’s price-to-earnings ratio remains well above historical averages, and valuations in the technology sector are stretching into territory that makes even seasoned investors anxious. And yet, many buyers remain fully committed. This leaves investors and analysts arguing over whether current prices are justified by earnings expectations or whether the market is pricing in a level of perfection that is rarely delivered.

By David Tepp, 'Forbes Councils Member' for Forbes Finance Council

Published October 21, 2025