The Fear and Greed Index, which measures market sentiment, has shown a trend of increasing greed from June 24 to July 8, 2025, reaching a level of 77/100 indicating extreme greed. During this period, the S&P 500 experienced a 23% surge over three months, primarily driven by price-to-earnings (P/E) expansion to 23 times earnings. The Buffett Indicator, a measure of market valuation relative to GDP, is near a record high. Market participants appear to be pricing in a perfect economic scenario involving a soft landing, advancements in artificial intelligence, and Federal Reserve interest rate cuts, which some analysts warn could be risky if any of these expectations fail to materialize. Historical data since 1989 suggests that investing at all-time highs generally outperforms, but when the P/E ratio exceeds 20, the average three-year return drops to 6.3% with a 40% chance of a decline greater than 25%. The NAAIM Exposure Index, which gauges active manager positioning, has reached 99.3%, close to maximum exposure levels often seen near market peaks. Despite elevated valuations, economic uncertainty remains high, yet U.S. stock markets continue to trade at the top 3 percentile of their historical P/E range. The S&P 500's tech-forward P/E multiple, which peaked at 31 last July, currently stands at 29.7, reflecting sustained high valuation levels in the technology sector.