Are US equities overpriced?

Many investors are concerned about the price of US stocks, given the country’s modest economic outlook. US GDP will likely fall below its long-term average, interest rate–sensitive sectors are weakening, and rising tariffs are adding to uncertainty. Despite these economic concerns, US market fundamentals have improved because of strong artificial intelligence (AI) investment. Four mega-cap tech companies have driven AI spending, with other businesses aiding the buildout benefiting financially. The S&P 500 is highly profitable, with equity returns continuing to rise, too. The concern is that...