Federal Reserve Chairman Jerome Powell recently commented on the stock market's elevated valuation.

The U.S. stock market has been abnormally volatile this year. The S&P 500 ( ^GSPC 1.56% ) crashed when President Donald Trump announced sweeping tariffs in April, falling 10.5% to record its fifth biggest two-day drop in history. The index ultimately declined 19% from its record high, narrowly avoiding bear market territory.

However, the S&P 500 rebounded quickly when the administration postponed the harshest tariffs, and the index has since recorded dozens of new highs as corporate earnings and the overall economy have been much stronger than initially feared. The S&P 500 has advanced 33% from its April low.

However, Federal Reserve Chairman Jerome Powell just gave investors a wa

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