The stock market has never been so good when people have felt so bad

Americans are in a decidedly bad mood. The stock market is decidedly not.

- Justin Lahart

This isn’t how it usually works. Instead, high stock prices have historically been associated with happy consumers, and vice versa. Here’s a look at what’s going on.

Just how bad is sentiment?

American attitudes just hit a milestone of sorts. On Friday, the University of Michigan reported that its index of consumer sentiment fell to the lowest level ever recorded in 70-odd years of surveys.

Sentiment was already low at the start of this year, but it fell sharply after the Iran war began at the end of February and sent gas prices sharply higher.

Until this year, the previous lowest level was in June 2022, when inflation was running at the highest level in decades. Friday’s sentiment reading was 10% below even that number.

“Prices remain extremely high, labor markets have unambiguously weakened in the last four years, and now we’re in the middle of a war,” said Joanne Hsu, director of consumer surveys for the University of Michigan. “I don’t think the fact that we’re lower than June 2022 should come as a surprise to anyone.”

Just how good are stocks?