Monday, November 2, 2026
The S&P 500 is up this year. As of this writing, the gain is about 14% so far, including dividends. That’s only about 2% below the all-time high as the index is trading at just 21 times the current year’s earnings.
But the story changes the deeper you dive.
The CAPE ratio, which uses average inflation-adjusted earnings over the past 10 years to judge market valuation, is at 41.1. That reading is in the 99th percentile of all data. It’s within a sniff of the measure’s all-time high, which was reached in 1999.
That figure helps show that despite index-level performance, we’re actually in a stealth bear market. For instance, 59% of stocks in the S&P 500 are down 20% or more, meaning they’re officially in a bear market.
Of course, it’s worse for some companies. Of the pressured ones, 41% are down 30% or more, while 17% of them are down over 50%.
Let’s recap: the S&P 500 is less than 2% off its all-time high while at the same time nearly all individual stocks that make up the index are doing much worse, with most having slipped into bear market territory.
Something is keeping the market afloat. Over the past month, it’s been the semiconductor industry. The average S&P 500 stock is down about 5% in that time, but the overall market is about flat. It’s because the chip sector is up more than 15%, all of it driven by AI.
Daniel A. White is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. Daniel A. White & Associates and CoreCap Advisors are separate and unaffiliated entities.