Americans Who Own Stocks Feel Better About the Economy

Consumer Sentiment

We have talked about the k-shaped, or bifurcated, economy a lot. For some Americans, the current economic conditions are very tough to weather. For others, things like high inflation and interest rates are much easier to stomach.

And there’s another layer to this: Americans who are invested in the stock market feel much more optimistic about the economy than those who don’t, per the University of Michigan’s Survey of Consumers from July.

This gap in sentiment has been growing, and now sits at its second-widest point since the turn of the century.

Stock Market Rally

The S&P 500, the broadest measure of the U.S. stock market, has risen more than 50% since its October 2022 lows, while the tech-focused Nasdaq Composite is up by more than 60% over that period, thanks to outsized gains by stocks exposed to the emerging artificial intelligence sector.

These rallies have boosted the value of many stock portfolios, as well as the overall wealth of stock-owning Americans. Many Americans are invested in the market through their retirement plans, and seeing their savings grow can provide a strong sense of financial stability.

If the stock market continues to perform, this gap in how different demographics feel about the economy could widen further.

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