Is there still room for growth in the U.S. stock market? Recently, the valuation tool known as the 'Buffett Indicator,' which has garnered significant attention after being referenced by Warren Buffett, has sent rare signals indicating that while the U.S. stock market has rebounded, its overall valuation remains reasonable and even suggests a buying opportunity. Experts advise investors to closely monitor two key events next week: the corporate earnings peak in the U.S. and the Federal Reserve's latest interest rate decision, both of which will directly influence market sentiment and capital flows.

The so-called 'Buffett Indicator' measures the total market capitalization of U.S. stocks (represented by the Wilshire 5000 index) divided by the Gross Domestic Product (GDP). Despite the strong rebound in U.S. stocks in recent weeks, this indicator currently stands at approximately 180%, having dropped to its lowest level since September 2023. This presents an intriguing signal for investors, suggesting that current U.S. stocks appear less 'expensive' compared to past overvaluation periods.

In fact, Buffett has stated that this metric is the 'best single tool' for assessing overall market valuation, and in the past during the tech bubble of 2000 and the peak of the U.S. stock market in 2021, this value was at high levels, corresponding with overheating market risks. However, with recent adjustments and a closer alignment to GDP growth, this decline is seen as an opportunity for potential buying.

Adam Sarhan, founder of 50 Park Investments, noted that such macroeconomic valuation tools are especially crucial during periods of market uncertainty, assisting investors in determining whether to re-enter positions. He also pointed out that while geopolitical tensions and tariff disputes remain variables, as long as the U.S. government does not adopt overly aggressive trade policies and corporate fundamentals remain strong, the U.S. stock market continues to hold mid-to-long-term attractiveness.

However, not everyone is ready to enter the market yet. Although the S&P 500 index has rebounded about 12% from its April low, it is still nearly 9% lower than its February peak, leading to a market dilemma. The coming weeks will serve as a litmus test for the market, with particular attention on President Trump's tariff strategies and the peak of the U.S. earnings season, where investors will focus on AI, semiconductor, and large tech industries. Additionally, the Federal Reserve is set to announce its interest rate decision on May 7, with comments on inflation and economic outlook expected to profoundly influence market expectations.