The numbers come first.
On Aug. 10, David Kelly — chief global strategist at JPMorgan Asset Management — calculated that 'the market value of all U.S. corporate equity is now over 400% of GDP.' For context: that ratio stood at 244% just before the pandemic, 204% at the peak of the 2000 dot-com bubble, and 74% before the 1987 crash known as Black Monday.
Kelly's metric is broader than the famous Buffett Indicator, which covers only publicly traded stocks. The Buffett Indicator itself is above 200% — a level its co-authors, writing in Fortune in 2001, described as 'strongly overvalued' and 'a very strong warning signal.' Kelly's all-equity measure makes that signal look modest by comparison.
AI exuberance, concentrated at the top
The S&P 500 is up more than 13% year to date in 2026, following three blockbuster years after the release of OpenAI's ChatGPT. Kelly found that second-quarter earnings included $150 billion of unrealized capital gains booked by just two large technology companies — boosting pro forma earnings per share by 50% year over year. Strip that out, and earnings growth was closer to 20%.
The McKinsey Global Institute's Global Balance Sheet 2026 report, published in July 2026, put the world's total stock of assets at nearly $1.8 quadrillion in 2025, up from $1.7 quadrillion the year before. Global household wealth reached a record $570 trillion. McKinsey found that most of this was 'paper wealth,' with U.S. equities valued at 3.7x GDP and 2.4x the net assets on corporate balance sheets.
Wall Street versus Main Street
Kelly's warning is direct: 'the value of American corporations depends, to a large extent, on the work and spending of the American people.' Stock prices are unlikely to keep soaring, he argued, 'unless the fortunes of American consumers and American workers see broader improvement.'
The real economy tells a different story. Wage growth has trailed inflation for four straight months. Homebuilding is stagnant. July's payroll report disappointed, with downward revisions to earlier months calling into question Kelly's own forecast of 50,000 to 100,000 jobs per month going forward.
Treasury Secretary Scott Bessent pushed back in a CNBC interview in August, citing 5.5% wage gains for the bottom quartile and declaring that the 'K-shaped economy is over.' He described what he called 'a C economy where the lower end of wage earners are finally calling it back.'
Bank of America Institute data offered partial support: lower-income household spending rose 5.4% in July versus 4.9% for middle-income households. But BofA also flagged one 'exception' — the top 5% of earners, 'where strong balance sheets and rising asset prices continue to support outsized spending growth.'
Apollo Global Management Chief Economist Torsten Slok pointed to strong box-office receipts for Spider-Man and The Odyssey as evidence that 'the consumer isn't tapped out.' Kelly, for his part, expects the Federal Reserve to hold rates steady, inflation to drift toward the 2% target, and GDP growth to average about 2% next year. He advised investors to diversify away from a concentrated bet on AI stocks.
CEO Times take
Free markets price what they know, and right now they know that AI is rewriting the productivity curve. But a ratio of 400% of GDP is not a valuation — it is a faith statement, and faith without earnings foundation is leverage waiting for a catalyst. The concentration of gains in two technology companies and the top 5% of earners is not a sign of a broken market; it is a sign of a market that has run far ahead of the broader economy that ultimately backs it.
Capital rewards clear rules and real growth. If the AI boom is to justify these multiples, it must translate into the kind of broad productivity gains that lift wages, expand homebuilding and widen the earnings base. Until then, the taxpayer — and the worker — is watching a scoreboard that does not yet reflect their game.
