Stocks are flying, but consumers are miserable

Two Americas, one chart

The S&P 500 and Nasdaq 100 are knocking out fresh highs, and if you only looked at your brokerage app, you’d think the economy was doing victory laps. But the University of Michigan’s May consumer sentiment reading just sank to 48.2 — the worst number in the survey’s nearly 80-year history. So yeah, the vibes are not vibing.

Why investors should care

This is the kind of split-screen market that makes people reach for the “K-shaped economy” cliché, because it’s basically doing the work for them. Asset owners are riding the stock-market sugar high, while a huge chunk of households is still getting punched by gasoline prices, tariffs, and sticky inflation expectations.

The uncomfortable part

According to the survey, about one-third of consumers brought up gas prices unprompted, and roughly 30% pointed to tariffs. That’s a fancy way of saying the everyday stuff in your life is still loud enough to drown out the stock-market confetti. Meanwhile, year-ahead inflation expectations remain elevated, which suggests people don’t exactly trust the Fed to ride in on a white horse and fix this quickly.

Big picture

If you’re an investor, the headline isn’t just that stocks are high and sentiment is low. It’s that the market is behaving like the rich kid at the party while the rest of the economy is checking whether it can afford gas and groceries. That gap can stay open for a while — but it’s not exactly the kind of backdrop that makes everyone feel carefree.