I have used a valuation band for the SP500 on Shiller’s data which trended higher with the trend of EPS, i.e. 6.1% annually since 1933 when FDIC placed bank speculation risk on speculators not on savers. 1933 is the beginning of the rise of Middle Class wealth.
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Note that the SP500 is well above the long-term trend. This is due to low inflation, 1.7% which has persisted in a down trend since 1982. Govt spending has been less inflationary once we got past the Great Society impact of the 1970s & Great Inflation when Volcker raised rates to ~18% in 1982.
Low inflation prices EPS higher and we are seeing the lowest consistent inflation ever recorded.