The Point, 5.23.26: Wall Street and Main Street barely know each other anymore

Why stocks can soar as consumers struggle. Plus the latest developments in the Iran--there aren't any! And whether you should buy SpaceX stock.

You don’t need to follow financial news every day to keep up with markets. You just need a sharp weekly summary of what really matters. Here’s The Point:

Consumer confidence is at record lows, while the stock market is close to record highs. Can this be happening in the same economy?

It can and it is. The University of Michigan’s consumer sentiment index is now at the lowest level ever, in data that begins in 1962. By that score, Americans are gloomier now than they were during the 2020 Covid pandemic, the 2008 financial crash, the 2001 terrorist attacks, the double-dip recessions that began in the late 1970s, and the oil shocks of 1979 and 1973, when gasoline rationing caused long lines at filling stations.

Stocks haven’t noticed, or if they have, they don’t care. The S&P 500 index has risen for eight weeks in a row, the best string of weekly gains since 2023. It’s half a percentage point from a new record high. It has done this with oil prices firmly above $100 per barrel for nearly three months and with President Trump’s Iran war reigniting inflation.

Can this last? Or does something need to give? It can probably last, for better or worse. Wall Street and Main Street are becoming two different worlds, and the widening gap we see now is the continuation of a long-term trend, rather than something new.

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