S&P 500 hit record highs while forward PE fell from above 23 in Oct to about 22 despite index levels.
Valuation compression is driven by temporary profit catalysts: AI infrastructure spending surge and war‑related energy profit spikes.
Citigroup’s Scott Chronert says PEG ratios for the eight biggest tech/AI stocks are attractive since 2013, yet analysts warn spending may stall.
Energy sector gains stem from Iran‑related conflict, but volatility around the Strait of Hormuz could quickly reverse oil‑major profit forecasts.