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The stock market is soaring but Americans are in a bad mood.

Americans are in a bad mood and haven’t been this pessimistic in 70 years, while the stock market isn’t at all. The University of Michigan’s Consumer Confidence Index has fallen to a historic low, while the S&P 500 and Dow Jones are trading at record levels. This is highlighted by the Wall Street Journal, which notes that Americans’ mood was already low at the start of this year, but plummeted after the start of the war with Iran at the end of February, which drove up gasoline prices.

Only in June 2022, when inflation had reached the highest level in decades due to Covid, there was as much concern, but as Joanne Hsu, director of consumer surveys at the University of Michigan, comments, “now prices remain extremely high, the labor market has undeniably weakened over the past four years, and we are in the midst of a war.” However, looking at the stock market, no one would imagine such a low sentiment: stocks have reached record levels and are very expensive. The S&P 500 index registers a valuation of 40.8, measured by the price-to-earnings ratio adjusted for the economic cycle. This is an indicator popularized by Yale University economist Robert Shiller, Nobel Prize winner in 2013 for his work on asset prices.

The S&P 500 has never been so high. The previous one was in 2000.

The only other time the value of this index was above 40 in the 145 years of data collected by Shiller was in the years immediately preceding and following the peak of the dot-com bubble at the beginning of 2000.

The year 2000 was also the year the Michigan index reached historic highs. Since then, it has never come close to those levels. What makes the situation today so unusual compared to the normal course of things? Economists, the WSJ explains, have several hypotheses. In 2000, the economy was growing and creating jobs, and inflation was contained. The Cold War was over, China was opening up, and the US government was running a surplus. Just as today with artificial intelligence, a new revolutionary technology was taking hold: the Internet, a new technology that would connect the world and improve lives.

Reasons for this distrust

AI is not seen in the same positive light. Robert Barbera, director of the Center for Financial Economics at Johns Hopkins University, identifies three distinct factors that could explain the current disconnect. First, stock prices may not align with the fundamentals of the US economy and could fall sharply. In other words, consumers are justified in being dissatisfied. Second, stock markets could foreshadow a future that many Americans have not yet fully understood, a future, for example, in which the war with Iran ends, inflation eases, and growth resumes. In other words, the euphoric trend of the stock markets is justified. The third factor combines euphoria and fear. The factor that has most fueled enthusiasm in the stock markets recently has been artificial intelligence, which is also a source of growing concern for many Americans. A world in which companies can use AI to reduce labor costs and dramatically expand profit margins is positive for stocks. But it could also be a world in which more people struggle to find jobs. “The surge in the stock market and the growing pessimism of families reflect the same thing,” Barbera said.

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https://www.agi.it/economia/news/2026-05-25/mercato-azionario-ma-americani-cattivo-umore-37220886/