Data through: August 2026 · updated Sep 1 · Updates: Daily (price), Quarterly (earnings)
MThe three bars show the last 3 months (end-of-month values) for this indicator, oldest left to newest right. Bar height reflects each reading relative to the other two — the tallest is the highest of the three, the shortest the lowest.
Historical context: Currently in the 93th percentile historically — elevated vs historical norms.
What this means right now: The S&P 500 is expensive by P/E standards. At these valuations, expected long-term returns are below average. This does not predict an imminent crash but does suggest tempering return expectations.
S&P 500 P/E (TTM) · Monthly · 1871–2026
Grey areas = NBER recessions · Scroll to read · zoom and pan in Expand
Monthly values
S&P 500 P/E (TTM) — the last 12 months
Every month's reading, with the band the heatmap gives it. The chart above shows the same series in full.
Month
Value
Band
Aug 2026
26.0
Concerning reading
Jul 2026
29.7
Concerning reading
Jun 2026
28.6
Concerning reading
May 2026
32.0
Concerning reading
Apr 2026
29.0
Concerning reading
Mar 2026
28.4
Concerning reading
Month-end readings of the same series the chart shows, from sp500_pe. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.
What is the S&P 500 P/E?
The Price-to-Earnings (P/E) ratio divides the current price of the S&P 500 by the actual earnings per share generated over the past 12 months. It answers a simple question: how much are investors paying for each dollar of corporate earnings? A P/E of 20 means investors are paying $20 for every $1 of earnings — a P/E of 30 means they are paying $30. The higher the P/E, the more expensive the market is relative to current profits.
The long-term average S&P 500 P/E ratio is approximately 16-17x. The market trades above this when investors are optimistic about future growth, low interest rates make stocks more attractive, or speculative sentiment is elevated. It trades below average during recessions, high inflation periods, or times of elevated uncertainty. Unlike the Shiller CAPE which uses 10-year average earnings, the trailing P/E uses only the most recent 12 months of earnings — making it more responsive to current conditions but also more volatile.
How We Color-Code the S&P 500 P/E
Our heatmap colors each indicator based on historically significant thresholds:
When this indicator reaches extreme levels, history shows consistent patterns:
Mar 2009Financial Crisis Bottom
P/E: 110.4x
S&P 500 returned +169% over the next 5 years. One of the best long-term buying opportunities of the past century.
Dec 1999Dot-Com Bubble Peak
P/E: 44.2x
S&P 500 fell -49% over the next 3 years. The most expensive market in history at the time preceded a catastrophic bear market.
Apr 2020COVID Earnings Collapse
P/E: 38.5x
P/E spiked because earnings collapsed — not because prices rose. The market recovered as earnings rebounded, returning +90% over the next 2 years.
Investor Checklist — Current Reading
Based on the current S&P 500 P/E reading of 26.0 (Negative):
⚠Expensive market — expected 10-year returns historically below average from these levels
✓Maintain existing positions but avoid adding leverage or overweighting equities
ℹExpensive markets can stay expensive — valuation alone is a poor timing tool
⚠Ensure portfolio is diversified — expensive markets are more vulnerable to shocks
Frequently Asked Questions
What is a good P/E ratio for the S&P 500?
The long-term average S&P 500 P/E is approximately 16-17x. Below 15x is historically cheap; 15-20x is fair value; 20-25x is moderately elevated; above 25x is expensive. However, what is "good" depends on interest rates — lower rates justify higher P/E ratios because bonds offer less competition.
Why did the P/E spike during COVID in 2020?
The P/E ratio spiked in 2020 because corporate earnings collapsed due to shutdowns, while stock prices recovered quickly. When earnings fall dramatically, P/E rises automatically even if stock prices stay flat. This is why P/E can be misleading during recessions — it reflects past earnings, not future recovery.
What is the difference between trailing P/E and forward P/E?
Trailing P/E uses the actual earnings from the past 12 months — it is based on real data. Forward P/E uses analyst estimates for the next 12 months — it is based on forecasts. Trailing P/E is more reliable because it uses known data, but forward P/E can be more relevant if earnings are expected to change significantly.
Does a high P/E mean I should sell my stocks?
Not necessarily. High P/E reduces expected future returns but does not predict when a correction will occur. Valuations are a poor market timing tool — the market can stay expensive for years. A high P/E is more useful for setting return expectations than for making buy/sell decisions.
How does the P/E ratio relate to interest rates?
When interest rates are low, bonds offer poor returns, making stocks more attractive even at high P/E ratios. When rates rise, bonds compete more effectively with stocks, putting downward pressure on P/E ratios. This is why the Fed Funds Rate is critical context for interpreting the S&P 500 P/E.
Trending Questions
AI context · refreshed August 30, 2026
What investors are searching about this indicator right now, answered using current news and data.
1Is the S&P 500 P/E ratio at 29.72 considered expensive by historical standards?
Valuations are stretched by historical standards, though the rally is supported by improving fundamentals including cooling inflation, stable interest rates, and resilient corporate earnings. Wall Street strategists are divided on valuations, with some arguing that the elevated forward P/E is justified and sustainable, while others argue it is a market headwind that could limit returns.
2How do current valuations compare to the dot-com bubble?
Comparing today's price-to-earnings ratio to historical averages is too simplistic, as added context reveals a market that's elevated but not nearly as extended as the late 1990s. In 2000, the S&P 500 Technology Index was trading at nearly 60x P/E, while today this index is trading at a much more reasonable ~26x.
3What is supporting the market despite high valuations?
S&P 500 companies have consistently surpassed consensus estimates, and major financial institutions have noted the strong earnings trend and expect it to continue, pushing the market higher. For 2025, S&P 500 companies are reporting year-over-year growth in earnings of 12.4%, and for 2026, analysts are projecting earnings growth of 14.7%.
4Should I be concerned about market risks given the current P/E ratio?
While risks remain including geopolitical uncertainties and mixed labor market signals, the challenges involve navigating elevated valuations and avoiding complacency that often accompanies bull markets. Traders are looking to the Federal Reserve for clarity on its economic outlook and strategy for bringing inflation back to target.
5What do strategists expect for S&P 500 returns in 2026?
Wall Street strategists are almost unanimously bullish on earnings for 2026, with estimates ranging from $300 to $320 per share, implying 11% to 19% year-over-year growth. Many pundits anticipate more muted returns in 2026, with predictions for the S&P 500 ranging from 8,100 on the high side to 7,100 on the low side, but most projections fall somewhere in the middle.