The Wall Street Journal published a lead story over the weekend with this scary headline:

The story reports: “The S&P 500 currently trades at 22.5 times its projected earnings over the next 12 months, compared with the average of 16.8 times since 2000″ – right before the housing crash.

Then why are investors scooping up stocks at these prices? Irrational exuberance?  Sure. Maybe.

We aren’t stock analysts – far from it – but if you look at the chart, you can see that stocks had a mini crash in April right after the Trump “Liberation Day” universal tariffs were announced.

The PE ratios reported by WSJ are PRE-tax. But the One Big Beautiful Bill cuts business taxes and allows immediate expensing. Supply side tax cuts RAISE PE ratios.