American households are betting on the stock market hitting record highs: once it falls, it could directly hit GDP growth

Gate News update: In 2026, the asset allocation of U.S. households is showing a rare shift. According to The Kobeissi Letter and FRED data, the share of U.S. household net worth tied to the stock market has risen to 25.63%, reaching a historical high and significantly exceeding the peaks during the Internet bubble period and in the 1960s. If observed from the perspective of financial assets, this share climbs even further to 47.1%, indicating that households’ dependence on capital markets is continuously increasing.

Behind this trend is the combined effect of a prolonged bull market and loose liquidity conditions since the 2008 financial crisis. At the time, the stock share was only 8.77%; now it has nearly tripled. However, the issue is that the current market environment has changed. Since 2026, major U.S. stock indices have generally weakened. The Nasdaq Composite is down nearly 6% year-to-date, while the S&P 500, Russell 1000, and the Dow Jones Industrial Index have all recorded pullbacks of varying degrees.

Rising geopolitical tensions further amplify market volatility, especially Middle East conflicts’ impact on energy prices and risk appetite, which has increased safe-haven sentiment. With asset allocation highly concentrated in stocks, these pullbacks are no longer just book-entry volatility; they may be transmitted to the real economy.

Consumption is the key variable. U.S. consumer spending makes up about 69% of GDP, and high-income groups serve as a primary driver of consumption, with their wealth highly dependent on stock market performance. Once assets shrink, spending willingness could decline quickly, dragging down overall economic growth. Goldman Sachs estimates that if the stock market falls another 10% in the second quarter, it could reduce GDP growth by about 0.5 percentage points.

Under the current structure, the amplification effect of capital market volatility on the economy has become significantly stronger. The future trajectory will depend on whether the market can achieve a smooth adjustment, or whether—under external shocks—it enters a deeper stage of repricing. At the same time, this shift may also affect capital flows and valuation logic for risk assets such as Bitcoin.