The evidence is broad and unusually stretched. This looks like bubble territory, even if no gauge can call the top.
Pressure is broad: 5 of 6 signals are elevated, led by Margin debt and Corporate credit spread.
5 / 6 signals are elevated. Valuation and leverage account for 70% of the score.
THE EVIDENCE
No single metric can call a market top. We combine valuation, leverage and household positioning with faster credit and sentiment signals.
01 / VALUATION
Price divided by ten years of inflation-adjusted earnings. It smooths the business cycle to show what investors are paying for durable earning power.
AS OF JUL 202602 / VALUATION
The value of US equities compared with annual economic output. It asks how much investors pay for each dollar the economy produces.
AS OF Q1 202603 / LEVERAGE
Money borrowed by customers against securities. Rapid growth means more leverage is chasing the market—and more forced selling if prices reverse.
AS OF JUN 202604 / POSITIONING
The share of household financial assets held directly or indirectly in equities. A historically high allocation shows how much investor wealth already depends on stocks continuing to perform.
AS OF Q1 202605 / CREDIT
The extra yield paid by Baa-rated US companies over 10-year Treasuries. Very tight spreads suggest lenders see little risk and can signal late-cycle complacency.
AS OF JUL 202606 / SENTIMENT
The VIX reflects expected near-term S&P 500 volatility. Low readings imply confidence; exceptionally low readings can reveal investor complacency.
AS OF JUL 2026HOW TO READ THIS
This stock market bubble score measures how closely today resembles historically overheated US equity markets. It does not predict when prices will turn—or whether they must.
Each indicator is normalized from 0–100 against transparent thresholds, then weighted toward fundamentals: valuation 45%, leverage 25%, positioning 10%, credit 12%, sentiment 8%.
WHAT THE SCORE MEANS
A bubble is not simply a market at an all-time high. It is a market where prices, leverage and confidence detach from the economic fundamentals beneath them. The composite score shows how strongly those conditions align today.
The Shiller CAPE and market-value-to-GDP ratio measure valuation. FINRA margin debt measures leverage. Household equity allocation captures positioning, while credit spreads and the VIX measure risk appetite.