The stock market going up is making a lot of people feel richer, which has led them to spend more money on things like new houses, cars, and other expensive items. This extra spending is giving the economy a big boost. Reports show that consumer spending has gone up, housing sales have hit new highs, and even company profits are stronger than people expected. All of this makes the economy look stable and healthy, even though job growth has been slow and inflation is still higher than the Federal Reserve’s target. The stock market is allowing the economy to keep up and prevent falling into a recession.
The downside is that this growth isn’t really spread across everyone. Most of the stock gains are helping the richest people, since they own nearly all of the stock market. Regular people who don’t have much invested aren’t feeling the same benefits, and their confidence about the economy has actually been going down. Also the stock market is currently very expensive compared to its past values, which means it could be due for a drop. If that happens, wealthy people may pull back on their spending and the job market wouldn’t be able to pick up the slack. That’s why the economy seems strong on the surface, but it’s really fragile. If the stock market falls, the whole thing could tip into a recession.
https://www.cnbc.com/2025/09/27/wealth-effect-stock-market-recession.html
Having a large majority of the wealth of the consumer being allocated to such a small amount of people necessarily bode well for identifying the health of the general consumer. However, with the current state of AI development especially seeing a growth in these markets show promising futures and current helpful figures as far as new company growth as a portion of GDP.
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