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The S&P 500 has climbed roughly 130% since January 2020, reaching all-time highs. Meanwhile, the University of Michigan Consumer Sentiment Index just cratered to 44.8 in May 2026, the lowest reading ever recorded.
The numbers tell two completely different stories
The Michigan sentiment reading fell from 49.8 in April and 52.2 a year ago to its current 44.8. That’s three consecutive months of decline.
The pain isn’t evenly distributed. Lower-income households and those without college degrees are bearing the brunt of the pessimism. In the same survey, 57% of respondents pointed to high gasoline prices as a direct drag on their financial well-being, a pressure largely tied to the ongoing Iran conflict and its ripple effects on energy markets.
Year-ahead inflation expectations have climbed to 4.8%, which means consumers aren’t just unhappy about today’s prices. They expect things to get worse.
Analysts now describe the gap between consumer sentiment and market performance as the widest on record.
A wealth gap measured in index points
For someone with a diversified portfolio, the post-2020 era has been extraordinary. A dollar invested in the S&P 500 at the start of 2020 is now worth approximately $2.30.
What this means for crypto and broader markets
The crypto market has been tracking this same dynamic. Bitcoin and Ethereum have largely mirrored the S&P 500’s upward trajectory, benefiting from the same liquidity conditions and risk-on sentiment that have powered traditional equities.
The trigger to watch is consumer spending. When 57% of consumers say gas prices are hurting their finances and inflation expectations sit at 4.8%, the runway for maintaining spending levels gets shorter.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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