Buffett Indicator hit 205%, signaling extreme market overvaluation

The Warren Buffett Indicator has climbed to 205%, the highest point ever tracked. That figure officially tops levels seen during both the Dot Com Bubble and the 2008 Financial Crisis.

It means the total market cap of US stocks now sits at more than double the country’s GDP, marking the most expensive valuation on record. 

The market hit this milestone just as trading began for the second half of 2025, and Wall Street’s reaction? Flat. Stocks barely moved. The metric may be screaming red, but traders seem to be holding their breath.

The Dow Jones Industrial Average gained 426 points, or 1%, while the S&P 500 hovered near the flatline and the Nasdaq Composite dropped 0.6%. The Dow’s movement came after a change in trading behavior.

Investors dumped tech names like Microsoft and Nvidia, two of the biggest winners in Q2, and rotated into health-care firms. Amgen, Merck, and UnitedHealth each jumped close to 3%, while Johnson & Johnson added almost 2%. The tech-heavy Technology Select Sector SPDR Fund, which gained nearly 23% last quarter, started Q3 down 1%.

Trump tax bill passes Senate as Musk slams it, Powell hints at pause

President Donald Trump’s new tax and spending bill passed the Senate on Tuesday with a narrow 51-50 vote. The legislation, which includes sweeping budget changes, now moves to the House. But it’s already facing public criticism from major corporate names.

Elon Musk, CEO of Tesla, called the bill “utterly insane and destructive” on Truth Social. In response, Trump posted on the same platform calling for the Department of Government Efficiency (DOGE) to investigate the government subsidies that Musk’s companies have collected. This is the second time this year the two have clashed over federal funding and regulatory priorities.

Elon’s reaction came on the same day Tesla stock dropped more than 5%. It was one of the worst-performing names among large caps. His public comments raised concerns about political backlash against clean energy subsidies, a key part of Tesla’s business model.

Elsewhere, Federal Reserve Chair Jerome Powell gave a policy update during a European Central Bank panel in Portugal. Powell said that without Trump’s tariffs, the Fed would have likely cut interest rates again by now.

“In effect, we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence,” Powell said. He didn’t clarify whether July would be too soon for another move, instead saying any decision would be based on data.

Corporate bitcoin buying overtakes ETFs for third quarter

On the crypto side, corporate buying of bitcoin continued to outpace ETFs for the third straight quarter. Public companies added around 131,000 BTC in Q2, increasing their holdings by 18%. In comparison, ETFs added 111,000 BTC, a growth of 8%. 

Leading the pack is Strategy, still holding the largest stash among public companies. But others are catching on. Ben Werkman, Chief Investment Officer at Swan Bitcoin, said the landscape is shifting. “It’s going to be very hard to catch Strategy’s scale,” Werkman said. “They’re going to be the preferred landing spot for institutional capital because of the deep liquidity around their equity, while these smaller equities are going to be really good risk returns for retail investors and smaller institutions that want more of that upside.”

Back on Wall Street, Berkshire Hathaway’s stocks responded to the Buffett hype. Class A shares closed at $733,214.44, up $4,414.44 or 0.61%, while Class B shares ended the day at $488.70, rising 0.60%. These gains came as the Buffett Indicator dominated headlines, though the company’s performance had no direct link to the broader market overvaluation that the metric tracks.

Markets had already recovered significantly after their April slide, triggered by Trump’s aggressive tariff policies. Back then, the S&P 500 flirted with bear market territory. Since then, things have turned. The S&P 500 closed out Q2 with a 10.6% gain, and the Nasdaq jumped nearly 18%.

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