Stock Market Surges While U.S. Economic Growth Stalls in 2026

During the first half of 2026 U.S. equities rallied sharply, yet real gross domestic product (GDP) growth slowed to roughly 1.9% from about 3.3% in 2023. Economists note that the stock market’s optimism, driven largely by artificial-intelligence (AI)-related firms, is out of step with an economy whose overall output remains modest.

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• Technology stocks represent about 35 percent of the market, rising to roughly 50 percent when the “expanded technology” group—Alphabet, Amazon, Meta and Tesla—is included.

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• The same sector accounts for only 10-15 percent of U.S. GDP, while consumer spending makes up roughly 70 percent.

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• AI-focused “big-tech” and semiconductor companies (Microsoft, Amazon, Oracle, Intel, TSMC, Samsung) have generated almost two-thirds of S&P 500 earnings growth since late 2022.

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• Households in the top 20 percent of earners (? $200,000 annual income) now shoulder nearly 60 percent of personal outlays, up from about 50 percent in the early 1990s.

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Senior markets economist Joe Seydl of J.P. Morgan Private Bank emphasizes that investors often conflate market performance with broader economic health, describing the two as “apples and oranges.” Mark Zandi, chief economist at Moody’s, characterizes the current ? 2 percent GDP pace as “soft” but confirms the economy is not in recession, noting growth is “steady” yet sluggish. Capital Economics’ July 1 research note attributes most recent earnings gains to AI-related “big-tech” firms and the semiconductor-hyperscaler ecosystem.

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Analysts warn that the economy’s reliance on high-earning households creates vulnerability. If affluent spending contracts, the disproportionate share of total consumption they represent could depress overall demand, potentially “sink the economy if things go sideways,” according to the same Moody’s analysis.

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• “I think there's this widespread perception the two should be in sync,” — Joe Seydl, senior markets economist, J.P. Morgan Private Bank

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• “We're growing. We're not in recession,” — Mark Zandi, chief economist, Moody’s

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• “The rise in earnings has been concentrated in the major 'big-tech' firms, especially the semiconductor companies and hyperscalers” — Capital Economics, research note (July 1)

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• “We're talking about apples and oranges in many ways.” — Joe Seydl, senior markets economist, J.P. Morgan Private Bank

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