The S&P 500 has hit an all-time high roughly 23 times in 2026, according to Creative Planning's Chief Market Strategist Charlie Bilello, per Yahoo Finance (1). At the same time, Bilello wrote on X (2) that consumer sentiment "is at an all-time low."
"We've never seen a gap this wide between Wall Street and Main Street," he added.
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Simply put, the stock market appears to some to be completely detached from the economic experience of ordinary Americans. In fact, an astounding 61% of people surveyed by CNBC (3) said they were "pessimistic" about the state of the economy and outlook for the future.
Despite stock markets hitting all-time highs, many Americans are feeling discouraged.
So, what's behind this "gap" between market events and consumer sentiment? For anyone planning their investments or budget in 2026, understanding it could be crucial.
Here are some of the reasons why the capital markets seem to be defying gravity.
Experts have suggested two potential theories to explain the growing disconnect between stocks and ordinary families: artificial intelligence valuations and the wealth gap.
NYU professor and economic commentator Scott Galloway has pointed out (4) that a whopping 40% of the S&P 500 is dedicated to artificial AI companies. Meanwhile, 92% of the GDP in the first half of 2025 was driven by AI-related infrastructure spending, according to Harvard professor Jason Furman (5).
"The U.S. has become a giant bet on AI and these companies are overvalued," Galloway told Kara Swisher in an episode of the Pivot podcast (6). "These stocks and the collective hallucination around valuations here … one or more of these stocks is going to be off 40% to 70% and it's going to send the U.S. and the global economy into a recession."
Galloway's prediction seems to have already been validated, with SpaceX (NASDAQ: SPCX) losing nearly 50% of its value while still trading at 80 times its trailing 12-month revenue as of July 29, according to data from Seeking Alpha (7).
The concentration and valuations of AI-related companies could explain why the stock market seems to be defying gravity in 2026. But that's just one side of the picture.
That's because many of the benefits of this ongoing boom have accrued to the wealthiest families across the country. In fact, nearly 87% of stocks are owned by the top 10% richest families in America, according to a 2025 analysis by portfolio manager Ben Carlson (8).
Simply put, tech CEOs building data centers and families that have already secured generational wealth seem to be the biggest winners by far in this economy. The rest have to deal with stagnant wages, AI-driven layoffs and an affordability crisis.
But that doesn't mean ordinary investors and savers have no way to accrue some of the same benefits. Here's how you can build wealth in this disconnected market.
Read More: Millionaires under 43 hold only 25% of their wealth in stocks. Here's where their money is actually going
In a stock market bubble, perhaps the smartest move could be to accumulate assets that are still undervalued and overlooked by the market. In practice, this could mean buying some non-AI stocks and alternative assets to benefit from the wealth effect.
If you're looking for a way to start buying up new assets, SoFi's easy-to-use DIY investing platform lets you buy stocks, ETFs and more with no commission fees and no account minimums.
SoFi is designed for both beginners and seasoned investors, with real-time investing news, curated content and the data you need to make smart decisions about the stocks that matter most to you.
Plus, for a limited time, you can get up to $3,000 in stock when you fund a new account.
If you're new to investing or simply struggling to find the overlooked, undervalued stocks in this market, you don't have to navigate it alone. Moby offers expert research and recommendations to help you identify strong, long-term investments backed by advice from former hedge fund analysts.
In four years and across almost 400 stock picks, their recommendations have beaten the S&P 500 by almost 12% on average. They also offer a 30-day money-back guarantee.
Moby's team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts and can help you reduce the guesswork behind choosing stocks and ETFs.
What's more, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.
For those looking to avoid the stock market altogether, you might want to consider alternative assets like fine art.
"It's likely there'll be a 10 to 20% drawdown in equity markets sometime in the next 12 to 24 months." That's according to Goldman Sachs CEO David Solomon, speaking at the Global Financial Leaders' Investment Summit in November 2025.
Meanwhile, the Shiller P/E has just soared past 40x, a level last seen in 1999, hinting that the decade ahead may bring below-average returns for those tied to the S&P 500.
With these warning signs, diversification isn't just smart — it's essential. Billionaires like Jeff Bezos and Bill Gates continue to invest heavily in stocks, but they also carve out a portion of their portfolios for assets that behave differently from the market.
One standout example: post-war and contemporary art. This asset class outpaced the S&P 500 by 15% from 1995 to 2025, while showing near-zero correlation to traditional equities.
Until recently, this world was off-limits. Now, with Masterworks, you can buy fractional shares in multimillion-dollar works by icons like Banksy, Picasso and Basquiat. While art can be illiquid and typically requires a long-term hold, it offers unique portfolio diversification.
Masterworks has sold 31 artworks so far, yielding net annualized returns like 14.6%, 17.6% and 17.8%.*
Moneywise readers can get priority access to diversify with art: Skip the waitlist here.
Past performance is not indicative of future returns. Investing involves risk. See important Regulation A disclosures at Masterworks.com/cd.
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Yahoo Finance (1); X (2), (5); CNBC (3); YouTube (4); Facebook (6); Seeking Alpha (7); A Wealth Of Common Sense (8)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.