MSN- How likely is it that the stock market crashes under President Donald Trump in the second half of 2026? Here's what history tells us.

What are the top predictions from the investor world? Margin has jumped 67% in one year, P/E is just off the charts, and are investors overestimating the pace and optimization of AI with all of the data center buildout? **CAPE is around 42-44** >The CAPE Ratio has exceeded 30 on just six occasions, including the present, since January 1871. Following each of the previous five instances\*, the Dow Jones Industrial Average, S&P 500, and/or Nasdaq Composite\* [*lost 20% to 89% of their respective value*](https://www.fool.com/investing/2026/03/15/stock-market-crossed-threshold-6-times-155-years/?utm_source=msnrss&utm_medium=feed&utm_campaign=article&referring_guid=880e3b8e-de59-4bcf-a227-14ff38ed9f46)*.* In other words, more than a century and a half of valuation history is telling us that premium multiples aren't well-tolerated on Wall Street. >Although the CAPE Ratio can't pinpoint when the music will stop or which catalyst will be responsible for pushing the stock market over the proverbial cliff, it has an immaculate track record of foreshadowing *significant* downside for equities. **Margin jumped 67% since April 2025** >Even though margin debt declined in July from its [all-time high of $1.502 trillion in June](https://www.fool.com/investing/2026/07/25/clock-ticking-wall-street-15-trillion-powder-keg/?utm_source=msnrss&utm_medium=feed&utm_campaign=article&referring_guid=880e3b8e-de59-4bcf-a227-14ff38ed9f46), it has soared by roughly 67% over 15 months (April 2025 – July 2026). >*Over the last three decades, we've observed three instances in which margin debt jumped by at least 65% over a 12- to 19-month timeline, and they* [*each preceded disaster for the stock market*](https://www.fool.com/investing/2026/08/09/stock-market-do-something-4-times-1997-wall-street/?utm_source=msnrss&utm_medium=feed&utm_campaign=article&referring_guid=880e3b8e-de59-4bcf-a227-14ff38ed9f46)*. This includes an 80% increase in margin debt immediately before the dot-com bubble popped, a 66% jump months before the financial crisis began, and a 95% boost in outstanding margin debt mere months before the start of the 2022 bear market.* >[Parabolic rises in outstanding margin debt are a *major* red flag](https://www.fool.com/investing/2026/07/03/time-tested-metric-predict-stock-market-downturn/?utm_source=msnrss&utm_medium=feed&utm_campaign=article&referring_guid=880e3b8e-de59-4bcf-a227-14ff38ed9f46) for the Trump bull market. In addition, national debt is through the roof.