A recent Bank of America survey of 169 fund managers managing $413 billion in assets reveals that a record 91% believe US equities are overvalued. Nearly half of these investors view emerging markets as undervalued. Additionally, 41% of respondents consider the US stock market to be in a bubble, up from 37% in July 2025. Despite these concerns, there have been record inflows into US stocks. Market valuations are at historic highs, with the share of MSCI World stocks trading above 10 times enterprise value to sales reaching approximately 23%, the highest level this century and surpassing the peak seen during the 2000 Dot-Com Bubble. The 12-month forward price-to-earnings ratio for the IT sector in the MSCI World index has hit 27 times, placing it in the top 10% of the most expensive readings over the past 20 years. Growth stocks are also near historical valuation extremes with a forward P/E of 26 times. The S&P 500 index is described as “unconvincing” despite reaching all-time highs, partly due to the market’s top 10 stocks accounting for a record 40% of its market capitalization. This concentration raises concerns that these leading stocks could drive market declines, as observed during the 2022 bear market. Inflation data indicates tariffs are contributing to higher goods prices, further complicating the market outlook. Analysts warn that stretched valuations could lead to sharp declines or weak gains ahead, as earnings growth has not kept pace with stock price increases.