The Record US Stock Market

There are two significant reasons earnings expectations have soared—and they are both probably temporary.

It’s six months, give or take, since AI excitement drove stock valuations above their 2020 bubble high to reach the highest since 2000, the peak of the dot-com bubble.

Something odd has happened since: Valuations, measured as the price-to-earnings or PE ratio, have plunged, while stocks rose to a record high this week.

This isn’t just unusual. It is unprecedented in data back to 1985.

There are two big reasons earnings expectations have soared. The first is that microchip prices have soared because of huge artificial-intelligence demand. 

The second is the war in Iran, which has given energy companies a huge boost.

The question for investors: Do the stocks, that have benefited from these one-off boosts, really offer better value now?

James Mackintosh Bloomberg 18 April 2026

https://www.wsj.com/finance/stocks/the-record-stock-market-rests-on-some-big-one-offs-7e7a2500


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