“Recession-proof.”
Professional economists might balk at the phrase, but it’s how the stock and bond markets see the economy in the second half of 2025.
DataTrek Research wrote on Tuesday that markets are flashing signs of extreme confidence in the trajectory of the US economy. Nicholas Colas, cofounder of the firm, pointed to two signals being sent in the stock and bond markets in particular:
In the stock market, valuations look similar to levels seen during the internet boom in the 1990s, Colas said, with the S&P 500 achieving a series of record highs in recent weeks.
The benchmark index now looks like it’s 8% more expensive than it was during the dot-com bubble, based on the forward price-to-earnings multiple among S&P 500 companies, DataTrek said. Given earnings estimates for 2026, the index looks on track to be 23% more expensive than it was during the dot-com bubble next year.
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