Barclays: S&P 500 valuation may indicate a turning point Barclays analysts point out that the S&P 500 is currently trading at 22 times its earnings over the next twelve months, and valuation alone may not be the main obstacle for stocks. They stated that historically, once valuations exceeded 22 times, average returns often improved and volatility decreased, indicating that if earnings growth remained positive, a bear market surrender could occur. They emphasized past examples such as 1998 and 2020, when similar valuations emerged after intense selling and strong rebounds. Despite the possibility of increased volatility in the short term due to fiscal uncertainty and upcoming tariffs, Barclays believes that the downside risk in the market is limited based solely on valuation, especially with expected earnings growth (around 9% in 2026). In short, despite the risks, the current valuation may support further market growth.