US Stock Market Valuation
Six independent gauges of how expensive US equities are — the CAPE ratio, the trailing P/E, the Buffett Indicator, price-to-book, price-to-sales, and the dividend yield — each measured against its own history so they sit on one cheap-to-expensive scale.
By Dominic Roe · Data Engineer & Business Intelligence Developer
Composite verdict · 6 gauges blended
Expensive — above its long-term average
Blending all 6 gauges puts US equities in the 99th percentile of their own history — more expensive than 99% of the time. 6 of 6 gauges sit in the expensive third of their history.
An equal-weighted average of each gauge’s percentile rank within its own history — a rough blend, not a precision tool. The gauges overlap (CAPE and the P/E both price earnings) and each has quirks, so read it as context alongside the individual gauges below. How each is built →
The six gauges
US CAPE
More expensive than 99% of its history · avg 17.4
US P/E (as-reported)
More expensive than 97% of its history · avg 16.2
Buffett Indicator
More expensive than 99% of its history · avg 86.1%
US P/B
More expensive than 100% of its history · avg 3.15
US P/S
More expensive than 100% of its history · avg 1.81
Dividend Yield
More expensive than 99% of its history · avg 4.21%
Each gauge is placed on the cheap-to-expensive scale by its percentile rank within its own recorded history (the dividend yield is inverted, since a higher yield means a cheaper market). No single metric is decisive — see how each is built and where it is weak on the methodology page.
How the US compares with the world
On every gauge here the US trades at a premium to the whole-world index — about 11% more expensive on earnings. Figures are current fund-reported index multiples for the iShares Core S&P 500 (IVV) and Vanguard Total World (VT), on the same basis.
| Measure | US (IVV) | World (VT) | US premium |
|---|---|---|---|
| P/E | 25.1 | 22.6 | +11% |
| P/B | 5.19 | 3.32 | +56% |
| P/S | 3.64 | 2.55 | +43% |
| Dividend yield | 1.09% | 1.59% | +46% |
A premium does not make the US a sell — its higher weighting of high-margin, high-growth companies has long justified richer multiples — but it does show how much of a head start its earnings must deliver. See the full valuations by country table for where every market sits. Snapshot as of 10 August 2026.
Expensive doesn’t mean “sell”
A high valuation lowers the long-run return the market is likely to deliver — it says little about the next year and nothing reliable enough to trade on. Expensive markets can stay expensive, or grow more so, for years. The evidence consistently favours staying invested and diversified over trying to time the market: time in the market has beaten timing the market, and over long horizons broad equity markets have rewarded patient investors even from pricey starting points. Use valuation to set expectations and shape your geographic mix — not as a buy or sell signal. Why valuation can’t time the market →
General information, not financial advice.