Inflation Is Heating up, While SpaceX Had the Biggest IPO Ever: Recipe for a Market Crash?
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Inflation Is Heating up, While SpaceX Had the Biggest IPO Ever: Recipe for a Market Crash?
Overview
It's been an exciting time to be in the stock market. Space Exploration Technologies Corp., a k a SpaceX, just completed the biggest initial public offering (IPO) ever, and OpenAI and Anthropic are likely to IPO later this summer. The S&P 500 is up 9.8% year to date, and artificial intelligence (AI) companies continue to generate incredible performance.
However, the market's rise comes with a few caveats: Inflation is rising again, in part because of the Iran war, and the Consumer Price Index (CPI) rose 4.2% in May, the highest level in three years. The market is near the second-highest valuation ever, per the cyclically adjusted P/E (CAPE) ratio. When it hit a record high of 44 back in 2000, it was followed by a market crash and three back-to-back years of market losses. Hovering at 41, is this market getting too close for comfort?
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Originally published at www.fool.com.
