Americans SLASH THIS While Markets Soar

A shopping cart filled with fresh fruits, vegetables, and groceries — AMERICANS LOSE BIG

The stock market is hitting record highs, and two out of every three Americans are quietly doing something that should alarm every economist and politician paying attention: cutting back on spending.

Story Snapshot

The Conference Board reports that two-thirds of consumers are pulling back on purchases due to rising prices, even as equity markets climb.
Soaring gas and food costs are outpacing paycheck growth, eroding real purchasing power for most households.
Only 18.5% of consumers surveyed said business conditions were “good,” a telling sign of how disconnected Wall Street and Main Street have become.
The conflict in the Middle East has driven Brent crude prices higher, adding fuel-cost pressure that ripples through groceries, transportation, and nearly every consumer category.

Wall Street Records Mean Nothing at the Checkout Line

There is a version of America doing extraordinarily well right now. Tech earnings are strong, equity portfolios are fattening, and financial headlines trumpet new market highs with the enthusiasm of a ticker-tape parade.

Then there is the other America — the one buying fewer items at the grocery store, skipping the road trip, and quietly postponing purchases they would have made without a second thought two years ago. These two Americas are not contradictions. They are the same country, split by who owns what.

U.S. consumer confidence slipped in May as war-driven inflation weighed on Americans: Two-thirds of Americans say they are cutting back on spending as gas prices and food costs stay elevated https://t.co/V99GPaDDao

— Quartz (@qz) May 26, 2026

The Conference Board’s consumer confidence data makes the divide impossible to ignore. Two-thirds of consumers said they are cutting back on spending due to rising prices. ^[4] That is not a rounding error or a statistical blip. That is a structural behavioral shift happening in real time, right beneath the surface of a market that looks, on paper, fine.

The gap between sentiment and market performance is not new, but this particular version carries a sharper edge because the inflation driving it is not abstract — it shows up every time someone fills up a gas tank or buys groceries. ^[5]

Gas Prices Are the Match That Lit This Fire

Conflict in the Middle East has pushed Brent crude prices sharply higher, and that increase does not stay contained to the gas station. It moves through the supply chain and lands on the shelf price of nearly everything that gets shipped, refrigerated, or manufactured.

A new poll found that 44 percent of Americans are driving less because of high gas prices, 42% have cut household expenses broadly, and 34 percent are making other significant lifestyle adjustments. ^[8]

These are not the behaviors of a consumer class that feels economically secure, regardless of what the Dow Jones is doing.

The situation in the Strait of Hormuz has compounded the pressure. As that critical shipping corridor remains a flashpoint, energy markets stay volatile, and volatility in energy means volatility in the cost of living for ordinary Americans. ^[10]

When gas spikes overnight — as it has done repeatedly in recent weeks — household budgets absorb the hit immediately, with no cushion and no warning. ^[7] That kind of economic whiplash does not show up cleanly in market indices, but it shows up decisively in consumer behavior surveys.

Why Sentiment Surveys Tell a Story That GDP Numbers Miss

Critics of consumer confidence surveys often point out, correctly, that self-reported “cutting back” is not the same as measured retail expenditure. People sometimes say they are spending less while actually spending the same or more. That distinction is real and worth keeping in mind.

But dismissing two-thirds of surveyed Americans as simply feeling bad while the economy hums along misses something important: when people believe they are squeezed, they make decisions — delaying purchases, skipping upgrades, avoiding restaurants — that eventually show up in hard economic data. Sentiment is a leading indicator, not a lagging one. ^[4]

The more honest read of this data is that inflation has done something politically and economically corrosive: it has made the prosperity visible in financial markets feel fraudulent to the majority of working Americans. Paycheck growth has not kept pace with price increases. ^[5] That is not a perception problem.

That is a math problem. And when two-thirds of a population adjusts behavior because of it, the economy eventually has to reckon with the downstream consequences, regardless of where the S&P 500 closes on any given Friday.

A growing share of Americans are tightening their belts and, by some accounts, pointing fingers at current policy for making it worse. ^[9] Whether that attribution is entirely fair is debatable, but the belt-tightening itself is not.