S&P 500
IndexS&P 500 valuation bands: 26.3× earnings · Aug 18, 2026
At 7,686 the index is priced at 26.3× its trailing 12-month earnings of 292.59 index points — between 25× and 30×, and richer than 93.6% of every month since 1871. Twenty times those same earnings would put it at 5,852 (-24%). The bands below are not horizontal lines: they climb as earnings grow, which is how a market can stay in one band for a decade while the index doubles.
The index against its earnings multiples#
Pick the earnings the bands are built on, whether the lines sit at round multiples or at where the multiple has actually spent its history, and how far back to look.
- Index
- 7,686
- EPS (12m)
- 292.59
- Multiple
- 26.3×
Each shaded region is the index priced between two multiples of its trailing 12-month earnings; the heavy line is the index itself, on a log scale. Bands past the dotted line are a 12-month projection at the last decade's earnings growth (+12.7%/yr) — the bands rise toward the price even if the price does nothing.
Where the index would trade at each multiple
At Aug 2026's trailing 12-month earnings of 292.59 index points, against today's 7,686. Earnings move too — these are today's arithmetic, not targets.
Share of months in each band, since 1950
FAQ#
- What are valuation bands?
- Lines drawn at fixed multiples of the index's own earnings — 15× earnings, 20× earnings, 25× earnings — plotted alongside the index itself. Because both move, the bands are not horizontal: they rise as earnings grow. Where the index sits relative to them is the market's P/E, read as a picture instead of a number. S&P 500 is at 26.3× trailing earnings today, between 25× and 30×.
- What multiple is the S&P 500 trading at now?
- 26.3× trailing 12-month earnings (7,686 index level ÷ 292.59 earnings per index point), as of Aug 18, 2026 — higher than 93.6% of all months since 1871. On the ten-year average earnings Shiller uses, the multiple is 40.5×, higher than 99.0% of history.
- Why do the bands pinch shut in 2009?
- Because earnings did. S&P 500 as-reported earnings fell roughly 90% into the first quarter of 2009, so every band anchored to trailing earnings collapsed with them and the index briefly printed a P/E above 100 — not because stocks were dear but because the denominator had vanished. This is the standard failure of a trailing multiple at a profit trough, and it is exactly the reason Robert Shiller averages ten years of earnings instead. Switch the earnings basis to the ten-year average to see bands that hold their shape through the cycle.
- Does a high band mean the market will fall?
- Not on any timetable you can trade. What the record supports is weaker: starting multiples have been informative about 10-year forward returns and close to useless about the next year. The index spent the whole second half of the 1990s above its 20× band and doubled from there before it broke. Treat the band as a statement about the price you are paying, not about what happens next quarter.
- Is this the same P/E as the S&P 500 P/E ratio page?
- Yes — the same number, by construction. Both divide by one canonical figure: the members' combined SEC-filed trailing profits ($2.61T across 484 companies), against their combined market value. The bands express it per index point so it can be drawn against a price line and compared with 1929; the P/E page expresses it as a plain multiple. If the two ever disagree, something is stale and it is a bug, not a methodology difference. The one number on that page that will NOT match is the fund-factsheet figure shown beside it — a weighted harmonic mean of members' own multiples, which excludes the 26 members that lost money and weights by float-adjusted index weight. It runs a fraction of a point lower and is labelled where it appears.
- Where do the earnings come from?
- Robert Shiller's long-run S&P series through Jul 2023's predecessor month, then our own SEC EDGAR pipeline: the current members' aggregate trailing net income per quarter, scaled to match Shiller's level at the overlap so the splice changes the growth rate, not the level. Prices are Shiller's monthly index extended with SPY's closes. Everything is nominal dollars, except the ten-year average basis, which restates past earnings into current dollars with CPI exactly as CAPE does.
Method & related#
Price is Shiller's monthly S&P index extended to Aug 18, 2026 with SPY's closes; earnings are his 12-month as-reported series through Jul 2023, and from that month our own aggregate of members' SEC-filed trailing net income, scaled to his level at the overlap. History runs on quarters where at least 400 members have filed; from the last such quarter to today the series carries to the current aggregate (every member's latest filed trailing net income — the same figure index earnings headlines), spread across the intervening months rather than stepped, since the jump is us learning about earnings that had already accrued. The ten-year average basis is the CAPE denominator — the trailing 120 months of earnings restated into current dollars with CPI — so the multiple you read on that basis is the Shiller P/E (40.5× today). For a same-day multiple computed bottom-up from the actual members rather than this century-long series, see the P/E ratio page; for the denominator itself, index earnings. Bands are arithmetic on published data, not forecasts or advice.
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