93% of U.S. households' stock market wealth is held by the top 10%

93% of U.S. households' stock market wealth is held by the top 10%, per Axios.

The wealthiest individuals in the United States currently possess an unprecedented share of the stock market, with the top 10% holding a record 93% of US equities, as per data from the Federal Reserve.

A larger segment of the American population is engaging in the stock market, reaching a record 58% of households owning stocks in 2023, according to the Fed's Survey of Consumer Finances.

However, stock ownership remains heavily concentrated among the affluent, as the bottom 50% of Americans owned merely 1% of all stocks and mutual fund shares in the third quarter, according to central bank data.

Despite a surge in retail trading during the pandemic, driven by remote work and government stimulus checks, ownership patterns haven't shifted significantly away from the wealthiest Americans. Some experts suggest that many retail traders exited the market during the challenging bear market of 2022, unable to withstand substantial losses.

Traditionally, stock market upswings have disproportionately benefited the already wealthy, given that the wealthiest households in the US primarily have their assets tied to equities, while most middle-class families have their assets linked to housing, according to a 2020 study.

In the third quarter, households in the bottom 50% collectively held $4.8 trillion in real estate assets but only $0.3 trillion in stocks, according to Fed data. In contrast, the top 1% held over $16 trillion in stocks and slightly more than $6 trillion in real estate assets.

Over the past decade, stocks have delivered substantial returns, particularly during a period of ultra-low interest rates, with the S&P 500 surging by 155%. The benchmark index gained 24% in the last year alone, fueled by easing inflation and investor expectations of Fed rate cuts in 2024.