Financial investors increasingly recognize the economic threats of climate change, yet most assessments of financial risk do not account for climate tipping points. Here, we combine advances in integrated assessment modeling of tipping points with dividend discount modeling to quantify risks of climate change damages for major stock indices. For the MSCI World and the MSCI Emerging Markets, two globally diversified indices, climate-related losses vary considerably by index and damage function; under RCP4.5, the expected loss ranges between 1–15%, and the 95% Value-at-Risk, a common risk measure, between 4–26%. Risks are highest in emerging markets with extensive coastal areas. Tipping points increase expected losses and Values-at-Risk by over 10%, primarily due to permafrost thaw and ice sheet disintegration. Unlikely but potentially catastrophic tipping points, such as the Atlantic meridional overturning circulation's collapse, exacerbate tail risks. Therefore, tipping points should be integrated into climate scenario analyses in the financial sector.