Jeffrey GundlachAdam Jeffery | CNBCJeffrey Gundlach, founder and CEO of DoubleLine Capital, raised concerns Monday about the stock market’s elevated valuation relative to historical levels and believes rising inflation could upend investors this year.”At extraordinarily high valuations is where we are, and its being supported by massive amounts of stimulus,” Gundlach told CNBC’s Scott Wapner on “Halftime Report.””If you go back four decades of stock market data, there are many valuation metrics that are in the top 1 percentile of overvaluation. So, the thing that’s keeping it going, of course, is the Fed with rates at zero and promises to stay at zero,” Gundlach added. This “allows for valuations to be record-breakingly high.”The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all rallied to record highs last week, further lifting their valuation levels closer to, or above, historical standards.For example, the S&P 500’s forward price-earnings ratio is currently just below 23. That’s near its highest level dating back to 2000.Leadership changeGundlach also noted that several trends that had been in place for about a decade are now reversing. He said emerging markets are starting to outperform the U.S., value is leading growth and companies with weaker balance sheets are outpacing those with generally stronger ones.”Things are definitely changing. The leadership of the United States being a top-performing market for 10 years basically has seemed to reverse,” he said. “A lot of things are changing. I suspect this is not a short-term phenomenon.”Another change that could put pressure on stocks moving forward is the possibility of rising inflation as the Fed pledges to keep rates low and its monetary stimulus programs running.Gundlach pointed to a comment made by Chicago Fed President Charles Evans on Jan. 4. Then, Evans said, “The more we get inflation up above 2% then markets are going to understand that, yes, we’re in it to win it.”Gundlach, who expects the consumer price index — a widely followed inflation metric — to hit 3% in its May/June report, said inflation “is a real game changer, should it occur.”The benchmark 10-year note yield traded at 1.136% on Monday, near its highest level since March 2020.DisclaimerSubscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world. Subscribe to watch the full interview below.