U.S. stocks are flirting with all-time highs Tuesday, but the rally is being driven by a slight pullback in oil prices that still leaves working Americans paying near-record costs at the pump and the grocery store.
The S&P 500 rose 0.5% and was on pace to close above its August record, while the Dow Jones Industrial Average climbed 185 points, or 0.4%, and the Nasdaq composite added 0.6% to its own all-time high set just the day before, according to the Atlanta Journal-Constitution. Meanwhile, Investor's Business Daily noted that AMD, Nvidia, and Tesla were rallying alongside a drop in Treasury yields—signs that the investor class is feeling optimistic again.
Here's what actually moved the needle: the price of Brent crude oil dropped 2.3% to $97.97 per barrel. That's down from nearly $110 a few weeks ago, and the AP—via the Journal-Constitution—acknowledged that the easing "removes some pressure from the high inflation that's squeezing people and businesses worldwide."
Notice the word: some. Oil at $98 a barrel is not cheap. It's just less punishing than $110. The AJC framed the drop as a boost to stocks; what it buried is that Brent crude is still sitting roughly 30% higher than it was a year ago, and every dime of that gets passed down to the consumer—in gas, in freight, in the price of everything on a shelf.
IBD, for its part, focused on the rally in tech names and the yield drop—classic Wall Street cheerleading for the portfolio class. Neither outlet bothered to connect the dots for the average American: the S&P 500 hitting a record does not lower your rent, your grocery bill, or your utility costs. It's a number that matters if you own significant equities. Most working Americans don't.
The structural reality hasn't changed. Inflation squeezed families and small businesses on the way up to $110 oil, and it's still squeezing them at $98. The stock market is pricing in relief that things got slightly less bad. That's not a recovery on Main Street. That's Wall Street trading on the expectation that the Federal Reserve might ease off—another round of the same dynamic where the investor class gets bailed out first and working Americans wait for scraps.
When the S&P 500 breaks a record, ask who actually benefits. The answer is never the family deciding which bills to skip this month.
