Why stocks are up even as the economy weakens

It’s been a great few weeks for almost anyone with money in stocks, and a bewildering one for anyone trying to explain the market. Stocks keep breaking records , Bitcoin is on a tear, and gold, the age-old “safe-haven” play, is up a stunning near-50% this year while investors are dumping the USD .

Meanwhile the U.S. government remains shut down, which means hundreds of thousands of federal employees aren’t being paid . New data on jobs and inflation are on pause, too. Still, what economic data is emerging doesn’t suggest strength. The private sector shed 32,000 jobs in September , according to ADP, with small businesses — often the canary in the economy’s gold mine — taking the biggest hit.

How can the data point in such wildly different directions, reflecting both market exuberance and economic strain?

Perhaps the simplest answer is that there isn’t just one U.S. economy anymore. There’s the economy most Americans live in, where a missed paycheck means that bills pile up, and then there’s the stock-market economy, where capital keeps flowing whether Washington’s lights are on or not.

Arguably, this split has been building for years, but the shutdown makes it harder to ignore. Stocks aren’t rising because investors are blind to economic crisis. They’re rising because the money that drives them belongs to people who are, by and large, structurally disconnected from economic pain .

Today, the top 20% of earners account for more than half of U.S. consumer spending. Most investable capital is held by institutions and high-net-worth households that respond more to interest rates and technological breakthroughs and less to whether a TSA worker misses a paycheck or even a mortgage payment.

When the rich get richer, their money doesn’t sit idle. It flows into stocks, private markets, venture capital, and other asset classes that broadly function to push indices and similar indicators ever higher. That feedback loop explains why Wall Street can keep busting through ceilings even as Main Street struggles.

Of course, there’s another wrinkle to all this: information is missing. The government shutdown is silencing the agencies that publish the data markets are often characterized as reliant on — including employment, inflation, trade, and housing.

In theory, the blackout could spook investors. In practice, it’s so far made little difference, perhaps because large financial institutions have long since developed their own data pipelines, from credit-card spending trackers to satellite-based shipping reads. The public scorecard is missing, which may make the Fed’s path cloudier, but the pros still have play-by-play coverage. This when a “jobless expansion” and AI breakthroughs may already be working to expand corporate margins.