S&P 500 equity risk premium falls to 2.3% as real yields rise

The article says the S&P 500 equity risk premium has fallen sharply to 2.3%, well below its historical median of 5.14%. That means investors are receiving much less compensation for taking equity risk relative to inflation-adjusted bonds, while elevated valuations and rising real yields increase the market’s vulnerability to disappointment. The piece frames this as a valuation warning for U.S. equities rather than a near-term catalyst, suggesting the market has become more sensitive to weaker economic or earnings outcomes. Overall, the message is cautious for broad U.S. stocks, as the current risk/reward profile looks less attractive than normal.