Buffett Indicator Signals Buy as US Stocks Rebound

The "Buffett Indicator," which compares the total U.S. stock market value to the nation's GDP, has declined to around 180%, its lowest point since September 2024. This drop follows recent market volatility tied to tariffs and a Japanese yen carry trade unwind, but has coincided with a strong S&P 500 rebound from April lows. Warren Buffett has called this metric the 'single best measure of where valuations stand,' and its recent pullback is seen by some analysts as a signal that equities are now attractively priced, though it remains above historical averages. Critics warn the indicator may overstate value by overlooking high interest rates and that such measures are imperfect for market timing. While optimism is growing among investors, market watchers note that lasting gains may depend on further trade resolution and Federal Reserve action. Despite the uncertainty, Buffett's approach and record cash reserves at Berkshire Hathaway have helped him outperform the broader market during recent turbulence.