Two in five Americans believe stock market only serves the top 1% | Business

Two in five Americans believe the stock market is not for them and only benefits the top 1%, according to a new Guardian-exclusive Harris poll examining investment habits and information about the economy.

The survey found that a similar share of Americans have incorrect assumptions about the relationship between the economy and the stock market. About 40% did not know that the economy and the stock market are not the same thing. And two-thirds of Americans incorrectly believed that a growing stock market meant the overall economy was also growing.

Although the economy was shaken by events such as the Covid epidemic, high inflation and the war in Iran, the stock market remained resilient.

But some economists have described the phenomenon as a K-shaped economy, in which the gap between high-income Americans whose wealth rises with the stock market and workers who feel their wages have less leverage against rising prices continues to widen in opposite directions.

The Dow Jones is up 9% this year, while the tech-heavy Nasdaq is up 12.5% ​​this year. After a major recovery from short-lived dips in the first weeks of the war in Iran, the AI ​​rally looks particularly like a rising tide that lifts all boats. SpaceX had the largest initial public offering (IPO) in history in June, and OpenAI and Anthropic are planning massive IPOs of their own next year.

The soaring stock market has been a massive payday for a small handful of Americans. half of the stock market owned The richest 1% of Americans own it, while the bottom 50% own only 1% of the market.

Data released Tuesday from the Bureau of Labor Statistics revealed that inflation fell slightly to 3.5% in June as the short-term ceasefire between the US and Iran lowered energy prices. Still, inflation remains above the pre-war level of 2.4%.

Despite the stock market’s recent record rallies, the survey also found that half of Americans believe today’s stock market is weak or are unsure how it is doing. An even higher share of respondents (60%) said they believed the U.S. economy was weak or were unsure about the direction of the market.

Economic uncertainty and a growing culture of online trading have pushed many young adults to invest earlier than previous generations. Although most proceed cautiously by pursuing long-term investment strategies, some are taking riskier bets, such as investing in artificial intelligence startups, cryptocurrencies, and day trading.

The survey found that many Americans are willing to take riskier bets than gambling on the stock market. One-third of survey respondents said they would “achieve higher financial returns by focusing more on gambling than today’s stock market.” This share rises to 46% among Generation Y and 44% among Generation Z.

• This survey was conducted online July 9-11 by the Harris Poll among a nationally representative sample of 2,154 U.S. adults, with 1,667 reporting some level of investment.