'Top of my list of worries': Why the stock market’s boom could become America’s biggest risk

Economic Risks - The stock market poses a significant risk to the economy, with approximately $9 trillion in equity gains over the past year driving high-income spending, which could reverse if stock portfolios decline [1][2] - The top 10% of earners account for about half of all consumer spending, highlighting the link between market performance and consumer behavior [2] Market Performance - US stocks experienced a rise as President Trump alleviated concerns regarding trade tensions with China, recovering from previous losses related to private credit worries [3] - Despite some recovery in regional banks, concerns remain about fraudulent loans and credit stress amid a prolonged government shutdown [3] Financial Market Concerns - The chief economist at Moody's Analytics expressed that risks in financial markets, particularly high valuations, are a primary concern, overshadowing issues in the banking system [4][5] - A potential reversal in stock market gains could significantly impact the wealthy households that are currently driving US economic growth [4][5] Consumer Behavior - There is a notable bifurcation in consumer spending, with high-income households maintaining strong spending levels, while lower-income households are adjusting their shopping habits to find bargains [6][7] - Lower-income consumers are visiting more stores per trip, increasing from three to five or six, as they seek promotions to stretch their budgets [7]