U.S. Consumer Sentiment Falls to Record-Low 44.8 as S&P 500 Hits New Highs
Updated
Updated · The Motley Fool · May 31
U.S. Consumer Sentiment Falls to Record-Low 44.8 as S&P 500 Hits New Highs
2 articles · Updated · The Motley Fool · May 31
Summary
The University of Michigan’s consumer sentiment index dropped to 44.8 in May, the weakest reading since the survey began in 1978 and below prior lows seen in 1980, 2008, 2011 and 2022.
High inflation, elevated interest rates and a K-shaped economy drove the slump, leaving many households under pressure even as top earners still account for about half of U.S. consumer spending.
That pain has diverged sharply from markets: the S&P 500 is roughly 40% above its April 2025 low, at record highs and on pace for a fourth straight year of double-digit gains.
AI-driven optimism and strong corporate profits help explain the gap, with S&P 500 companies on track for 28% year-over-year earnings growth in the first quarter, led by tech.
Past sentiment troughs were followed by 15%-22.3% S&P 500 gains over the next year, but the current mix of record-low confidence and already-soaring stocks has no clear precedent.