Index Valuation

What each major index costs today against the earnings of the companies in it, over the last year (trailing P/E) and in analysts' estimates ahead (forward P/E). A forward P/E below the trailing one means earnings are expected to grow; the last column shows by how much.

How to read it

Rising earnings are what support stock prices over time, so positive expected growth is normal; analysts expect it most of the time, and their estimates tend to run optimistic. The warning sign is growth that shrinks toward zero or turns negative. Recessions usually come with falling earnings, though falling earnings don't always mean a recession. Watch the direction from week to week more than the level.

How it's calculated

• Trailing P/E is the index's total market cap divided by its companies' total net income over the last 12 months.
• Forward P/E divides the same market cap by expected earnings: for each company, the average of analysts' estimates for this fiscal year and next.
• Weighting: bigger companies count for more, as they do in the index. The Dow is price-weighted, so it adds up share prices and earnings per share instead.
• Losses count: a company's losses are subtracted from the others' profits, so the P/E is what the whole index costs against what the whole index earns. For the trailing P/E, each company's loss counts up to 5% of its market cap, so a few very large losses (often one-off write-downs) can't swamp the index. Each row shows how many members are profitable.
• Expected earnings growth is the trailing P/E divided by the forward P/E, minus 1. Because the forward estimate reaches into next year, it covers more than 12 months of growth.
• Data: prices, market caps and earnings from Yahoo Finance, through the same weekly feed as the Screener. Members come from the S&P 500 and Nasdaq 100 lists, SSGA's DIA fund for the Dow, and Vanguard's VTWO fund for the Russell 2000. Updated every Monday, from Friday's close.

How it compares with published figures. Index P/Es vary by source, because each uses its own estimates and its own rules for losses and one-off gains. Checked against the Wall Street Journal's table in October 2026, most of these figures were within about 10%, and the Russell 2000's within about 5%. Over 40% of the Russell 2000's companies lost money in the last year, and with every loss counted in full, its losses outweighed the rest's profits. The 5% cap on each loss stands in for the one-off charges that published figures usually leave out.

Analysts' estimates tend to run optimistic, so the growth column is what they expect, not what will happen. Educational use only. Not financial advice.