The S&P 500 earnings per share (EPS) forecast for 2025 has been revised downward to $259 from a peak near $275, while the price-to-earnings (P/E) ratio has expanded to nearly 23. For 2026, the EPS estimate has also decreased to $294.10 from a previous peak of about $310, with the P/E ratio rising to approximately 20. The growth rate for the index has slipped to 9.1% for 2025 but increased to 10.9% when considering the 12-month forward EPS estimate, indicating the market remains relatively expensive on a growth-adjusted basis. Factors supporting elevated valuation multiples include record returns on invested capital (ROIC), a high number of S&P 500 stocks with ROIC above 20%, strong profit margins, and a cash-to-debt ratio close to 50%, which particularly supports higher price-to-sales multiples for non-cyclical businesses. According to a Reuters poll, the S&P 500 index is projected to close 2025 at 5,900, down from a February poll forecast of 6,500. Similarly, the Dow Jones Industrial Average is expected to end 2025 at 43,708, lower than the earlier forecast of 47,024.