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.
