From 2016 to 2026,
US federal gross debt grew from ~$19 trillion to ~$38 trillion.
US total market cap grew from $25 trillion to ~$75 trillion.
Debt doubled and market cap tripled.
That is probably higher valuation but also can mean better structure of the economy, better competitiveness, better margins.
A rough decomposition of the gap might be:
- ~50–60% from real earnings growth and improved business quality.
- ~40–50% from valuation expansion and expectations for future AI-driven productivity.