Market Snapshot: The Trump rally in the stock market may be turning into a bubble

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The Trump rally is turning the stock market into one giant bubble.

Donald Trump has made the stock market great again with major indexes logging their best performances in months in November. But that frothiness is prompting warnings that the market is getting too bubbly, setting up investors for a disappointment in coming weeks.

The S&P 500 index’s forward price-to-earnings ratio, a key metric to measure valuation, has jumped to 16.9 multiples at the end of last week from 16.4 multiples on Nov. 8 while the P/E ratio for the small-cap S&P 600 soared to 19.9 from 17.4 during the same period, said Ed Yardeni, chief investment strategist at Yardeni Research Inc.

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