The Stock Market Is Doing Something for Only the 6th Time in 156 Years, and History Says It's Clear What Comes Next for Stocks

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While history decisively shows that Wall Street's major stock indexes rise over long periods, it also tells us that bull markets aren't indefinite and that when things look too…

Despite a few periods of short-lived volatility, 2026 has shaped up as another banner year for the stock market. The ageless Dow Jones Industrial Average (DJINDICES:^DJI), benchmark S&P 500 (SNPINDEX:^GSPC), and innovation-powered Nasdaq Composite (NASDAQINDEX:^IXIC) have reached several record highs, courtesy of the artificial intelligence (AI) infrastructure build-out.

While history decisively shows that Wall Street's major stock indexes rise over long periods, it also tells us that bull markets aren't indefinite and that when things look too good to be true, they typically are.

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Currently, we're witnessing the stock market do something for just the sixth time since January 1871 -- and if history has its say, it's pretty clear what comes next for stocks.

At any given time, several headwinds are waiting in the wings to knock the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite off their respective pedestals. Current examples include the parabolic increase in outstanding margin debt, persistently elevated inflation, and the potential for an AI bubble-bursting event.

But among this laundry list of headwinds, none stands out more than premium stock valuations.

Given that there's no one-size-fits-all blueprint to evaluate and value individual companies or the broader market, discussing value can be incredibly tricky. The subjectivity and emotion that come into play when valuing stocks or the broader market are what make accurately predicting short-term movements so challenging.

Most investors rely on the price-to-earnings (P/E) ratio to quickly evaluate the relative cheapness or priciness of a public company or the broader market. Unfortunately, the traditional P/E ratio isn't perfect.

This is where the stock…

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