The Stock Market Is Not Overvalued, Yet

Despite geopolitical risks and inflation fears, S&P 500 earnings growth has surged to 39.3%, supporting continued market gains. AI-driven capex has likely peaked in hardware and semiconductor stocks, with multiples reverting as the cycle matures, possibly by 2027. Valuations for major indices remain reasonable, provided earnings growth persists; forward multiples are at or below 10-year averages. Economic resilience is evident with low unemployment claims and rising PMI, suggesting GDP growth near 2% despite inflation and supply shocks.