S&P 500 P/E Ratio (Valuation) History
Direct answer: The S&P 500's price-to-earnings ratio has averaged approximately 15-17x over the past century. It peaked at approximately 123x in December 2009 (earnings temporarily depressed) and at 30-32x in March 2000 (dot-com bubble). The Shiller CAPE (10-year average earnings) has averaged approximately 16-17x and stood at approximately 35-38x in 2024, above the historical average.
S&P 500 trailing P/E ratio at year end (selected years)
| Year | Trailing P/E (approx) | Shiller CAPE (approx) | Context |
|---|---|---|---|
| 1990 | 15x | 15x | Near long-run average |
| 1995 | 17x | 21x | Bull market expanding |
| 1997 | 25x | 28x | Dot-com enthusiasm building |
| 1999 | 30x | 44x | Dot-com peak valuation |
| 2002 | 31x | 22x | Earnings trough post-bust |
| 2007 | 20x | 27x | Pre-crisis expansion peak |
| 2009 | ~84x | 13x | Earnings trough; CAPE shows cheap |
| 2010 | 18x | 21x | Recovery underway |
| 2015 | 23x | 27x | Post-QE expansion |
| 2018 | 20x | 29x | Rate shock year-end selloff |
| 2019 | 25x | 31x | Pre-COVID peak |
| 2020 | ~38x | 33x | Earnings crash; prices held up |
| 2021 | 26x | 40x | Zero rates; peak CAPE |
| 2022 | 19x | 28x | Rate shock compression |
| 2023 | 23x | 32x | AI enthusiasm rally |
| 2024 | 27x | ~37x | Elevated vs. historical average |
Source: Robert Shiller: Online Data (CAPE data). Last verified: September 2026.
Frequently asked questions
What P/E ratio is considered normal for the S&P 500?
The long-run average trailing P/E for the S&P 500 is approximately 15-17x. However, 'normal' has shifted upward since the 1990s due to: lower interest rates (higher P/E justified when risk-free rates are low), higher corporate profit margins (technology companies earn more per dollar of revenue), and improved financial information reducing risk premiums. Many analysts argue the fair P/E in the 2020s is 18-22x due to structural changes. The Shiller CAPE's long-run average is approximately 16-17x, and above-average CAPE has historically predicted below-average forward returns.
Why was the P/E so high in 2009?
In 2009, earnings were depressed to near zero or negative for many financial companies due to loan write-downs from the financial crisis. The 'E' in P/E shrank dramatically even as stock prices stabilized and began recovering. This created a mechanically high P/E that was not indicative of stretched valuation but rather temporarily suppressed earnings. Using normalized earnings (as in the Shiller CAPE which averages 10 years of earnings) avoids this distortion: the Shiller CAPE in 2009 fell to approximately 13x, correctly identifying stocks as cheap relative to history.
Can high P/E ratios persist for years?
Yes. The U.S. market has traded at above-average P/E ratios since approximately 1992, with interruptions during the 2002 and 2008-2009 crashes when earnings recovered faster than prices. Japan provides a cautionary example: the Nikkei traded at 50-80x P/E in the late 1980s before a 30-year secular bear market. However, U.S. corporate governance, innovation, and earnings growth have supported higher-than-global-average valuations. The tension in 2024-2025: elevated CAPE suggests below-average forward returns, but timing the correction has been historically very difficult.