The CAPE ratio, a cyclically adjusted P/E measure, has crossed 40 for only the second time, after first doing so in 1999 and peaking at 44 in 2000. Its average since 1879 is 17.8. Even so, the S&P 500 is up 12% and the Nasdaq-100 up 16% this year. The article recalls the dot-com bust, when the S&P 500 lost more than 40% over three years and the Nasdaq-100 almost three-quarters. It notes bear markets have historically been much shorter than bull markets, and argues investors should hold resilient stocks rather than panic sell; since the 2003 bottom, the S&P 500 has gained 771%, despite a 57% fall in 2008 and a 34% drop in the COVID-19 crash.
Summary written by Upside AI from the original article. Read the source for full details.
Original headline: The Market Is Triggering a Warning Not Seen in Decades . Here What History Says Comes Next .
Read the original on fool.com ↗
Keywords
Open a keyword to see other news on the same topic.
Related tickers and likely impact
QQQ
▼ Likely negativeInvesco QQQ Trust
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/20/2026 | 717.52 |
| Change that session | -0.12% |
SPY
▼ Likely negativeSPDR S&P 500 ETF
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/20/2026 | 769.01 |
| Change that session | +0.33% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Most US stocks rise following strong profit reports from Equifax , other big companies
- Tech Stocks Power S & P 500 and NASDAQ Higher
- Exchange-Traded Funds Higher as US Equities Rise After Midday
- Tech Stock Rebound Nudges US Equity Futures Mostly Higher Pre-Bell
- We Just Witnessed a Unique Stock Market Measure Do Something for Only the 4th Time Since 1997 , and It Offers a Chilling Outlook for Wall Street
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite have hit several record closing highs over the past four years, driven by AI infrastructure spending, record-breaking IPOs and better-than-expected earnings. The article highlights outstanding margin debt, reported monthly by FINRA, as a measure of investor risk-taking, since borrowing can magnify both gains and losses. Since 1997, margin debt has surged at least 65% over a short period four times, and the three earlier episodes preceded major bear markets, including the dot-com crash, the financial crisis and the 2022 downturn. From April 2025 to June 2026, margin debt rose 77% to an all-time high of $1.502 trillion, which the article says could foreshadow trouble for stocks, though long-term investors have historically benefited.
- US stock indexes off to mixed start as tech sector weighs on market
Technology stocks led a broad sell-off on Wall Street on Friday, making it the market's worst week since late June. The S&P 500 fell 1.1%, the Nasdaq sank 2.1% for its first weekly loss in five weeks, and the Dow closed 0.3% lower. Chip stocks were among the biggest decliners, with Micron down 5.6%, AMD off 6%, Broadcom down 4.5% and Intel lower by 5.8%, amid doubts about how long the AI investment boom will last. The 10-year Treasury yield eased to 5.09%, while CME Group data showed the odds of a Fed rate hike in December had risen to 74.3%. Brent crude jumped 3.7% to $109.86 a barrel as oil supply stayed under pressure without a U.S.-Iran deal to end the Iran war.
Related markets
Latest news
- Meta’s (NASDAQ:META) Q3 2026 sales top estimates, quarterly revenue guidance slightly exceeds expectations
Meta Platforms (NASDAQ: META) reported Q3 revenue of $64.6 billion, up 26.1% year on year and about 2% above estimates. Revenue guidance for the Q4 midpoint is $74.5 billion, 1.2% above analyst expectations. GAAP EPS of $3.83 was 29.9% below consensus, due to a $9.89 billion charge tied to an agreement with 52 attorneys general to resolve teen mental health litigation, with payments of up to about $18.59 billion; excluding it, EPS would have been $7.40. Operating margin fell to 20.1% from 40.1%, and free cash flow was -$2.12 billion. Daily active people reached 3.64 billion, up 100 million year on year.
- A SpaceX-Tesla megamerger could benefit both companies and Elon Musk's personal fortune
SpaceX shares rose 8% and Tesla 3.5% after Elon Musk said each company had formed special committees to discuss a possible combination. At current market values, the merged company would be worth about $3.5 trillion, the largest deal ever, and Musk argues it makes sense because both businesses rely heavily on artificial intelligence. Musk owns 11% of SpaceX and 19% of Tesla, and a change-in-control provision in Tesla's pay plan could treat many performance targets as met in a merger, which would make him richer. Although the shares are very expensive by most measures, most analysts still call them a bargain, and many work for banks hoping to win Musk's business. Democrats have called for investigations into SpaceX's federal contracts and could scuttle plans if they win big in next month's midterm elections.
- Netflix Is Down 38% Since Completing Its 10-For-1 Stock Split. Here's Why the Sell-Off Is Worsening After Its Latest Earnings.
Netflix shares are down 37.9% since the 10-for-1 stock split was completed on November 17, 2025, as of the October 20 close. After its third-quarter 2026 report, the stock fell 5.9% to $64.62 in after-hours trading, which would mark a new two-year low. Revenue rose 11.8% year over year, and operating margin widened from 28.2% to 34.6%, but the company now expects $2.7 billion in full-year ad revenue, down from $3 billion, due to a slower rollout of ad product capabilities. Its 2026 revenue forecast of $51.1 billion sits 0.2% below the prior midpoint, and the article also points to competition from YouTube, a third price increase in under three years, and a valuation of 17 times 2027 earnings. Netflix ended the quarter with $8.19 billion in cash against $12.66 billion in long-term debt.
- Where Will Novo Stock Be in 10 Years?
Novo, a Denmark-based pharmaceutical company, reached an all-time high in 2024 but has since faced clinical and commercial setbacks and lost substantial market value over the past two years. Its diabetes products, including Ozempic and Rybelsus, and its obesity drug Wegovy remain core, but U.S. patents on the active ingredient in these drugs expire in 2032, potentially opening the door to cheaper generics. Near-term catalysts include CagriSema, which could be approved by year-end and combines semaglutide with cagrilintide, though it fell short of the 25% mean weight loss Novo had hoped for. The pipeline also includes amycretin, UBT251, and several oral weight loss candidates. The author sees the pipeline as deep but warns of rising competition from dozens of weight-loss drugs, slower market growth, and possible U.S. drug price negotiations.
- NextEra Energy ( NEE ) Q3 2026 Earnings Call Transcript
NextEra Energy reported third-quarter adjusted earnings per share of $1.24, up 9.7% year over year. Florida Power & Light's net income reached $1.62 billion, versus $1.463 billion a year earlier, while adjusted earnings at NextEra Energy Resources rose 13% to $1.247 billion. The renewables and storage backlog reached 36.7 gigawatts, and FPL raised its large load target to 8 gigawatts by 2032. Shareholders have approved the pending combination with Dominion Energy, with state regulatory reviews expected to conclude in early 2027. Management maintained its 2026 adjusted earnings guidance and is targeting the high end of the range, even though wind generation in Q4 is projected to fall to 90% to 95% of the long-term average due to El Niño.
- Amazon logistics automation offers long-term margin gains, Jefferies says
Jefferies says Amazon's warehouse automation and expanding logistics network could lift retail margins long term by reducing labour dependence. Amazon has deployed over 1 million robots, but only 40% to 45% of its US small-sortable fulfillment centers are highly automated, leaving room for growth. A US$1 hourly wage rise would add about US$1.1 billion to costs, and Amazon has around US$27 billion of visible capex planned for automation and delivery. Jefferies sees third-party parcel delivery as a growth area, with US delivery stations possibly growing from about 575 to 950 by 2030 and early trials showing 20% to 25% savings for shippers. Grocery is harder given US$10 to US$12 delivery cost per order, though the broker sees potential in Amazon's planned Illinois hybrid retail concept expected in 2028.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.