Markets: CAPE Ratio at 1929 and 2000 Levels—S&P 500 Threatened with 10% Decline

Herz — World Desk · 25 July 2026 at 18:02 · 30s summary · 2 min read

What We Know

On July 25, 2026, the CAPE ratio reached levels comparable to those recorded before the 1929 crash and before the 2000 dot-com bubble burst, according to 24 heures. This indicator was designed by economist Robert Shiller, a Nobel Prize laureate and professor at Yale University.

The CAPE—Cyclically Adjusted Price-to-Earnings, also known as the Shiller ratio—measures the valuation of a stock market by comparing the price of shares to their average earnings over ten years, adjusted for inflation. A high level is historically interpreted as a signal of market overheating.

Experts estimate that the S&P 500 faces a potential 10% correction. This stock index comprises 500 large U.S.-listed corporations; managed by Standard & Poor's, it represents approximately 80% of the U.S. stock market by capitalization.

Context: Two Historical Precedents

Before the 1929 crash, which triggered the Great Depression, the CAPE had reached exceptionally high levels. In 2000, during the collapse of the so-called "dot-com" bubble, the ratio had reached a second historical peak, before a severe decline in U.S. indices. These two episodes constitute the main benchmarks against which the current CAPE level is compared.

Timeline

1. 1929
   The CAPE reaches exceptionally high levels before the stock market crash that triggers the Great Depression.
2. 2000
   The dot-com technology bubble bursts after a second historical peak in the CAPE. U.S. indices decline sharply.
3. July 25, 2026
   Experts alert about a CAPE level comparable to those of 1929 and 2000, estimating the S&P 500 faces a 10% correction.

The Numbers