Warren Buffett's preferred valuation metric, the 'Buffett Indicator,' is signaling that U.S. equities are relatively cheap following a recent rebound in the stock market. The indicator, which measures the ratio of the total U.S. stock market value (Wilshire 5000 Index) to U.S. GDP, has dropped to its lowest level since September, standing at approximately 180%. This decline comes even after a 12% rally in the S&P 500 from its April lows, with the index still about 9% below its February record. The indicator had previously reached historic highs in late 2024, coinciding with market peaks and periods of heightened volatility, including the dot-com bubble and the pandemic sell-off. Market participants are watching closely ahead of Berkshire Hathaway's annual meeting in Omaha, Nebraska, where Buffett, the 94-year-old CEO, is expected to comment on market conditions. Berkshire's cash holdings were last reported at $321 billion, and Greg Abel is likely to succeed Buffett as CEO. Other valuation measures, such as the S&P 500's forward price-to-earnings ratio, now at 20.6 times compared to a 10-year average of 18.6, also indicate stocks are less expensive than earlier in the year, though still above long-term averages. Critics note that the Buffett Indicator does not account for the impact of higher interest rates, which can pressure corporate profits and stock prices. Investors are also monitoring the ongoing earnings season and the upcoming Federal Reserve meeting as potential catalysts for market direction, while trade policy uncertainty under President Donald Trump continues to influence sentiment.