The U.S. stock market is historically expensive — but investors rushing to blame a bubble in artificial intelligence may be overlooking the expansion in sector valuations beyond technology.

DataTrek Research studied the 10-year average of the S&P 500’s SPX forward price-to-earnings ratios across the index and found that “the real story behind currently elevated S&P 500 valuations relative to history” lies within nine sectors other than information technology.

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“Technology has seen the smallest increase of any group,” while only the utilities sector XX:SP500.55 has seen a multiple contraction, Nicholas Colas, co-founder of DataTrek Research, said in a note emailed Monday. “It is impossible to demonstrate any sort of ‘AI bubble’ in tech-sector valuations just now,” he added, pointing to the chart below.

The chart shows the S&P 500 now trades at a 14.4% premium to the 10-year average of its forward price-to-earnings ratios.

Colas found that the sectors with the largest jump in forward P/E multiples relative to their 10-year average are energy, industrials and communication services.

The energy sector’s XX:SP500.10 price-to-earnings ratio has surged more than 36%, while the industrials sector’s XX:SP500.20 has jumped 32% and that of communication services XX:SP500.50 has expanded around 30%, the DataTrek note shows. By contrast, the S&P 500’s information-technology sector XX:SP500.45 is trading at a 5.3% premium to its average 10-year forward P/E multiple.

Tech is the S&P 500’s largest sector, and swings in such stocks can heavily influence the trajectory of the index.

Over the past decade, tech has been the best-performing sector in the S&P 500  due to its incremental earnings power, according to DataTrek.

Large-cap tech’s long-term track record of “high returns on capital has allowed it to hold high (if capped) valuations, with its ability to grow sustainable earnings faster than expected the sole driver of stock outperformance,” Colas wrote. Future equity returns for tech will depend in part on the ability of companies in the sector to demonstrate that their incremental investments in generative AI can produce earnings growth over time, he added.

The U.S. stock market closed higher Monday, with the S&P 500 gaining 0.5%, the Dow Jones Industrial Average DJIA edging up less than 0.1% to notch a new record peak, and the technology-heavy Nasdaq Composite COMP advancing 0.9%, according to Dow Jones Market Data.

The S&P 500’s tech sector rallied a sharp 1.6%, extending its big rebound on Friday following a turbulent week, FactSet data show. Although tech is down so far this year, rotations under the hood of the S&P 500 — into areas such as energy, industrials, materials XX:SP500.15 and consumer staples XX:SP500.30 — have helped propel the index to a 2026 gain of 1.7% through Monday.

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