Wall Street is pricing no ‘material drop’ in market thanks to consumers, says Fed’s Hammack—problem is, shoppers are increasingly shaky

A customer shops for furniture at an IKEA store on September 26, 2025 in Emeryville, California. (Credit: Justin Sullivan—Getty Images)

• U.S. markets are riding record highs on optimism that consumers will keep spending. But confidence is weakening amid a stagnant job market and tariff-driven inflation. Cleveland Fed President Beth Hammack said markets remain bullish, yet consumer sentiment surveys show sharp declines, with households increasingly worried about their job prospects and rising prices.

Since the end of the pandemic, consumers have proved to be the backbone of the American economy—much to the surprise of some of Wall Street’s biggest names. This underlying strength has pushed the U.S. stock market to record highs this year, with analysts pricing in continued growth of the S&P 500.