The S&P 500 is currently under scrutiny as it trades at extreme valuations, with the Shiller PE nearing 37. This is ominously close to the levels seen during the dot-com bubble in 2000. Recent assessments by the Federal Reserve highlight stagflation as a major threat for 2025 and possibly into 2026. Investors should be cautious as these tensions could lead to volatility in the market. Understanding these economic signals is essential for anyone invested in the S&P 500.