Economist Peter Schiff has warned that a stock market crash could strike before the November midterm elections, citing historically high stock valuations and a weakening economy as major risks facing investors.
“Remember, this is October,” Schiff wrote in an Oct. 22 X post, alluding to the month’s history of major market downturns. “Plus, we have the most expensive stock market in history, bond yields have risen sharply, inflation is rising rapidly, the job market is soft, and the economy is weak.”
Although Schiff is no stranger to dire forecasts — he, for example, warned about the housing bubble before the 2008 financial crisis and has repeatedly cautioned about an inflationary debt spiral — his latest warning comes as several of the risks he identified on X have become more pronounced.
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The 10-year Treasury yield climbed from a low of 3.96% before the Iran war began in February to more than 5.3% in late September, its highest level in more than two decades. The nearly 140-basis-point jump has pushed borrowing costs higher across the economy.
The war has also driven energy prices sharply higher, contributing to renewed inflation as both the Consumer Price Index and Producer Price Index have accelerated. At the same time, the labor market has weakened. Hiring in 2025 was the slowest outside a recession since 2002, and recent job growth has fallen well short of economists’ forecasts.
Meanwhile, Wall Street’s heavy reliance on artificial intelligence stocks has become another source of concern. The Philadelphia Semiconductor Index (SOX), a bellwether for chipmakers, recently recorded its longest losing streak since 2008, declining for eight consecutive trading sessions.
Years of gains in AI-related stocks have also pushed valuations higher and left the broader market increasingly dependent on a relatively small group of companies. JPMorgan’s basket of 41 AI-related companies accounts for 49% of the S&P 500’s total market value, a level of concentration not seen since the 19th-century railroad boom, according to Seeking Alpha.
Other valuation measures suggest stocks are historically expensive, too. The ratio of total stock market capitalization to U.S. gross domestic product has reached historic highs, with veteran investor Jeremy Grantham telling CNBC over the summer that “this is the most expensive market in American history.”
