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94hotat an extreme
84.4% above its 10-year average | Data for Sep 2026
Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.
What it is
The monthly average of the S&P 500 index (compiled by Professor Shiller, from 1871).
US stocks make up about half of world stock market value, and risk appetite worldwide often follows them.
Monthly average of the S&P 500.
Where it stands now
coldcoolneutralwarmhotHatched = earlier periods that were also hot
When it was here before
US stocks after it began, cumulative1 yr2 yr3 yr
For each period, the changes 1, 2 and 3 years after it began are cumulative and measured from its first month; “What happened next” is measured from every hot month, so the two give different numbers. The events named beside each period are major events of that time, not necessarily related to the readings here.
What happened next
Bars: median cumulative changeEarlier months with US stocks hot, excluding the current period (507)All months (1631)
Median of the deepest drop below the starting month within the next 5 years: −8.3% for months with US stocks hot; −10.5% for all months.
The hot months come from a small number of market episodes (10), and neighboring months are not independent events; rises and falls are all listed. This is the historical record, not a forecast.
| Median position | Back to neutral (40–60) | Still hot or more extreme | |
|---|---|---|---|
| 1 yr later | 91hot | 4% | 76% |
| 3 yr later | 87hot | 5% | 64% |
| 5 yr later | 80warm | 14% | 50% |
Has hot or cold lined up with later returns?
1890–2021: average yearly change in US stocks over the next 5 years
There is no clear relationship between hot or cold and what came next. The gaps between the bars are not consistent across months (rank correlation below 0.25); this is a record of the past, not a forecast.
What it is linked to
US stockstoWorld stocksCommon explanation: Ripple · same direction
The US is the world’s largest stock market, and US corrections often spill over to other markets; in a crisis, markets everywhere fall together
This issue: US stocks at 94 (hot), World stocks at 72 (warm) — both above normal, in line with the common explanation.
Supported by the dataAgreement +0.77 · in step in 45 of 45 5-year periods
US stockstoTaiwan stocksCommon explanation: Ripple · same direction
Electronics and semiconductors make up a large share of Taiwan’s market, which moves closely with US stocks
This issue: US stocks at 94 (hot), Taiwan stocks at 99 (hot) — both above normal, in line with the common explanation.
Supported by the dataAgreement +0.62 · in step in 14 of 15 5-year periods
Credit spreadtoUS stocksCommon explanation: Cause · opposite direction
A wider credit spread means costlier funding and higher default risk for companies, weighing on share prices
This issue: Credit spread at 9 (cold), US stocks at 94 (hot) — Credit spread below normal, US stocks above normal, in line with the common explanation (this is an inverse link).
Weak or inconsistentAgreement +0.47 · in step in 24 of 39 5-year periods
Fed assetstoUS stocksCommon explanation: Cause · same direction
Large Fed bond purchases push down long-term rates, investors move the money from the bonds they sell into stocks and other assets, and stock prices get support
This issue: Fed assets at 42 (neutral), US stocks at 94 (hot) — at least one is in the neutral range (40–60), so we make no call this issue.
Not visible in our dataAgreement +0.06 · in step in 6 of 8 5-year periods
In most periods the two moved the way the common explanation says, but their highs and lows do not line up over the whole history, so overall no relationship is visible.
Leading indextoUS stocksCommon explanation: Knock-on · same direction
Strong economy → company profits → share prices
This issue: Leading index at 42 (neutral), US stocks at 94 (hot) — at least one is in the neutral range (40–60), so we make no call this issue.
Not visible in our dataAgreement −0.03 · in step in 34 of 51 5-year periods
In most periods the two moved the way the common explanation says, but their highs and lows do not line up over the whole history, so overall no relationship is visible.
US stocks and House prices, 8 economies are often linked: both are driven by interest rates and how loose or tight money is. They share a common source, so we do not draw a link between them.
Values
Data and sources