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About
Market Heat Gauge: Stock Market Risk and AI Bubble Indicator
Five indicators, one 0 to 100 reading
Today's Market Heat reading
Is the stock market running hot? This gauge ranks five public indicators against their own history and averages them into one 0 to 100 reading, with AI infrastructure spending and market concentration alongside for context.
A risk gauge, not a prediction, not investment advice. It shows how stretched conditions look against history. It does not say what markets will do next.
Market Heat gauge
A risk gauge, not a prediction, not investment advice.
Latest input Oct 8, 2026
What moves the needle (score out of 100)
- Shiller PE (CAPE) 99
- VIX (daily close) 65
- Chicago Fed NFCI 60
- 10Y minus 2Y Treasury 62
- Sahm rule (real-time) 38
Each bar is where today's reading sits in that indicator's own history, flipped where low readings mean more risk (VIX, NFCI, yield curve). The gauge is their simple average, each weighted 20%. Open "How the gauge is built" below for the full method.
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Shiller PE (CAPE)
Monthly (latest daily)41.62as of Oct 8, 202699th percentile since 1871Price divided by 10-year average inflation-adjusted earnings. Higher = richer valuation.
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VIX (daily close)
Daily15.41as of Oct 8, 202635th percentile since 1990Lower = calmer options market. Very low readings can signal complacency.
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Chicago Fed NFCI
Weekly-0.49as of Oct 2, 202640th percentile since 1971Negative = looser than average financial conditions; positive = tighter.
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10Y minus 2Y Treasury
Daily+0.47%as of Oct 8, 202638th percentile since 1976Lower or negative (inverted) = flatter curve, historically a late-cycle signal.
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Sahm rule (real-time)
Monthly0.00 ppas of Sep 202638th percentile since 1959Higher = unemployment rising faster vs its 12-month low. 0.50 or more has marked past recession starts.
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S&P 500 top-10 weight
Quarterly, by hand37.6%as of Jul 31, 202636.5% on Mar 31, 2026; not in the gauge (no long free history)Share of S&P 500 index weight held by the 10 largest constituents. Updated each quarter from the official fact sheet.
Hyperscaler capex, last four reported quarters
Combined: $586B · latest quarter: $193.6B| Company | 3 quarters back | 2 back | Prior | Latest |
|---|---|---|---|---|
| MicrosoftAdditions to property and equipment | $19.4BJul to Sep 2025 · 10-Q | $29.9BOct to Dec 2025 · 10-Q | $30.9BJan to Mar 2026 · 10-Q | $35.8BApr to Jun 2026 · 10-K |
| AlphabetPurchases of property and equipment | $23.9BJul to Sep 2025 · 10-Q | $27.9BOct to Dec 2025 · 10-K | $35.7BJan to Mar 2026 · 10-Q | $44.9BApr to Jun 2026 · 10-Q |
| AmazonPurchases of property and equipment | $35.1BJul to Sep 2025 · 10-Q | $39.5BOct to Dec 2025 · 10-K | $44.2BJan to Mar 2026 · 10-Q | $54.2BApr to Jun 2026 · 10-Q |
| MetaPurchases of property and equipment | $18.8BJul to Sep 2025 · 10-Q | $21.4BOct to Dec 2025 · 10-K | $19.0BJan to Mar 2026 · 10-Q | $30.1BApr to Jun 2026 · 10-Q |
| OracleCapital expenditures | $12.0BSep to Nov 2025 · 10-Q | $18.6BDec to Feb 2026 · 10-Q | $16.5BMar to May 2026 · 10-K | $28.5BJun to Aug 2026 · 10-Q |
Cash capital expenditures from each company's cash flow statement (10-Q or 10-K). Quarter values are reported 3-month figures or year-to-date minus the prior year-to-date figure in the same fiscal year. Microsoft excludes finance leases. Oracle fiscal quarters end Aug, Nov, Feb and May. Each figure links to the filing on SEC EDGAR. Context only, not part of the gauge.
How the gauge is built
A risk gauge, not a prediction, not investment advice.
Method
For each of five indicators, the latest reading is ranked against that indicator's full available history (mid-rank percentile, ties count half). Where a low reading signals more risk, the rank is flipped (100 minus the percentile). The gauge is the equal-weight average of the five scores, rounded to a whole number. If fewer than three indicators are available the gauge is not shown.
| Indicator | Weight | Hot when | History | Updates |
|---|---|---|---|---|
| Shiller PE (CAPE) | 20% | High | 1871 on, monthly | Daily latest |
| VIX | 20% | Low (complacency) | 1990 on, daily | Daily |
| Chicago Fed NFCI | 20% | Low (loose conditions) | 1971 on, weekly | Weekly |
| 10Y minus 2Y Treasury | 20% | Low or inverted | 1976 on, daily | Daily |
| Sahm rule (real-time) | 20% | High | 1959 on, monthly | Monthly |
Bands: 0 to 19 Cold, 20 to 39 Cool, 40 to 59 Neutral, 60 to 79 Warm, 80 to 100 Very hot. Market concentration and hyperscaler capex are shown for context and are not in the gauge. The data refreshes on weekdays after the US close (5:15 PM ET).
Sources and citations
- Shiller PE ratio by month, multpl.com (based on data from Robert Shiller, Irrational Exuberance); https://www.multpl.com/shiller-pe/table/by-month, October 9, 2026. Cited source.
- Chicago Board Options Exchange, CBOE Volatility Index: VIX [VIXCLS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/VIXCLS, October 9, 2026. Copyrighted: citation required.
- Federal Reserve Bank of Chicago, Chicago Fed National Financial Conditions Index [NFCI], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/NFCI, October 9, 2026. Copyrighted: citation required.
- Federal Reserve Bank of St. Louis, 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity [T10Y2Y], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/T10Y2Y, October 9, 2026. Copyrighted: citation required.
- Sahm, Claudia, Real-time Sahm Rule Recession Indicator [SAHMREALTIME], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/SAHMREALTIME, October 9, 2026. Public domain: citation requested.
- S&P Dow Jones Indices, S&P 500 fact sheets as of March 31, 2026 and July 31, 2026; https://www.spglobal.com/spdji/en/indices/equity/sp-500/
- Microsoft, Alphabet, Amazon, Meta and Oracle Forms 10-Q and 10-K, U.S. Securities and Exchange Commission EDGAR; https://www.sec.gov/edgar
Machine-readable data: JSON endpoint (opens in a new tab).
Market Heat gauge FAQ
What is the Market Heat gauge?
A single 0 to 100 reading that summarizes how stretched US market and economic conditions look compared with their own history. It combines five public indicators: the Shiller CAPE ratio, the VIX, the Chicago Fed National Financial Conditions Index, the 10-year minus 2-year Treasury spread and the real-time Sahm rule.
Is this an AI bubble indicator?
It is one input for that question, not a verdict. The score measures valuation, complacency, financial conditions and late-cycle signals across the whole market. The page adds AI-specific context, hyperscaler capital spending and the share of the S&P 500 held by its ten largest companies, but those two are not part of the score.
How is the score calculated?
Each indicator's latest reading is ranked against its full history as a percentile. Where a low reading signals more risk (VIX, NFCI and the yield curve), the rank is flipped. The five scores are averaged with equal 20% weights and rounded to a whole number.
Does a high reading mean stocks will fall?
No. This is a risk gauge, not a prediction, not investment advice. Markets can stay expensive or calm for years, and a hot reading says nothing about timing.
How often is it updated?
The data refreshes every weekday after the US close, around 5:15 PM ET. Each indicator keeps its own schedule: the VIX and the yield curve are daily, the NFCI is weekly and the Sahm rule is monthly. Every tile shows the date of its latest value.
Where does the data come from?
FRED (Federal Reserve Bank of St. Louis) for the Sahm rule, the yield curve, the NFCI and VIX history; multpl.com, based on Robert Shiller's data, for CAPE; S&P Dow Jones Indices fact sheets for market concentration; and SEC filings for hyperscaler capex. Full citations are in the method drawer.
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