Why the market's 'doom' signals are wrong, says Jeremy J. Siegel

Markets pushed to fresh highs over the summer, even as investors weighed sticky inflation, Fed uncertainty, and geopolitical risk. Against this backdrop, WisdomTree's Sr. Economist Professor Jeremy J. Siegel and Director of Model Portfolios Joe Tenaglia, CFA®, CMT®, joined Mindy Yu, CIMA®, Betterment's Sr. Director of Investing, for "Making Sense of Today's Markets," a live conversation on what's really driving markets and why headlines don't always tell the full story.

Here are five key takeaways from the conversation. You can check out the full webinar recording for the data and analysis behind each one.

Siegel's core argument: comparing today's Treasury yields to stock earnings yields is "apples and oranges," because stocks are real assets that carry inflation protection, while bonds don't. Stocks have historically outpaced both bonds and bills by a meaningful margin over the long run on an inflation-adjusted basis. This is a gap that has held up across market cycles.

And while today's stock-bond gap is narrower than historical averages, Siegel emphasizes that "stocks and bonds are different animals in terms of their inflation protection." He noted, "There is no long-run advantage of bonds over stocks at these valuations or circumstances."

Check out the webinar to see his forward-looking numbers on stocks versus bonds.

According to Siegel, the fracking revolution turned the U.S. from a major oil and gas importer into the world's top producer. Energy intensity per dollar of GDP has fallen sharply since 1950, and Siegel argues this is why even the Iran and Hormuz conflict hasn't derailed markets the way past oil shocks did. Natural gas prices have actually fallen since the war began, even as oil ticked up.

Without fracking, Siegel believes the U.S. would likely be in the depths of a recession right now rather than absorbing an oil shock in stride. He draws a parallel between recent opposition to data centers and the fight against fracking 20 years ago.

Siegel pushes back hard on labor-market doom scenarios, citing two counterexamples: Radiologists were supposed to be automated out of jobs a decade ago, and yet employment and income in this field have since risen. Online booking was supposed to wipe out travel agents, but LinkedIn now ranks travel advisory among its 25 fastest-growing jobs for 2026.

His logic is straightforward: Productivity gains increase incomes, higher incomes create demand for things people couldn't previously afford, and that new demand reabsorbs displaced labor. He believes there could be a three-day weekend within the next decade and a boom in luxury and recreational spending. Positing that most white-collar skills are transferable, he predicts that we'll see workers move between sectors rather than exit the workforce entirely.

He also cited an Anthropic study of different professional fields suggesting that observed AI adoption is running well below theoretical capability. That gap between what AI could do and what it's actually doing, in his view, is what will define the next few years.

Consumer sentiment, as measured in the University of Michigan index, sits near all-time lows. Siegel notes that across the last 50 years, every prior reading at this level came during an actual recession. Yet consumers keep spending. So what explains the gap?

Siegel has a theory for the gap, and it comes down to how sentiment itself gets measured: Different surveys (e.g., the University of Michigan index versus the Conference Board) sample different segments of the population, and that can shift the headline number more than the reality of the underlying economy.

Watch the webinar to hear his full breakdown of why the numbers may be painting a more negative picture of the economy than consumer behavior suggests.

By Siegel's read, the market is trading at around 20x earnings—roughly the level he has long viewed as a reasonable long-run multiple. After years of pointing to a long-run justified P/E of 20x as a benchmark, he now sees valuations landing around there. In his view, that level is historically reasonable rather than stretched, and still supports the case for stocks to outperform bonds over the long term.

For a closer look at which non-U.S. markets appear more attractively valued, why Siegel believes the U.S. still warrants a premium based on its liquidity and growth prospects, and a deeper dive into calculations, watch the webinar recording here.