Stocks and the economy are out of sync, and AI is the reason

The S&P 500 is up nearly 10% in the first half of 2026 while the underlying economy is grinding along at roughly 2% growth. According to CNBC, economists say the split is real, and one factor is doing most of the heavy lifting: AI.

The disconnect in numbers

The S&P 500 rose nearly 10% in the first half of 2026, and the Dow Jones Industrial Average climbed almost 9% over the same period, its best first-half performance since 2021. Those gains follow the S&P 500 rallying 24% in 2023, 23% in 2024 and 16% in 2025.

Meanwhile the real economy has cooled. Real GDP has slowed from roughly 3.3% growth in 2023 to about 1.9% so far this year. Federal Reserve officials projected in June that the U.S. economy would grow about 2.2% in 2026, while most economists expect growth to remain close to 2% for the year.

AI is doing the heavy lifting

Artificial intelligence seems to be the main reason for the divergence, economists said, with AI stocks going “skyward” and buoying the broader market, per Moody’s Mark Zandi. Technology accounts for about 35% of the stock market, and roughly 50% when including Alphabet, Amazon, Meta and Tesla, which are classified as consumer companies but trade like Big Tech.

Together, semis and hyperscalers have generated nearly two-thirds of all S&P 500 earnings growth since OpenAI introduced ChatGPT in late 2022, yet technology represents only about 10% to 15% of the broader U.S. economy.

Why the two don’t have to move together

J.P. Morgan Private Bank’s Joe Seydl said there is a widespread perception the two should be in sync, but from a purely analytical perspective they are two very different phenomena, “apples and oranges in many ways.”

Starting around 2014 the correlation between S&P 500 earnings growth and real GDP began to drop sharply, turning negative after 2019 and reaching a low near -0.4 by 2024, meaning the two no longer move together as they once did.

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The K-shaped consumer risk

Households in the top 20%, those with incomes of about $200,000 or more, account for nearly 60% of personal outlays, up from about half in the early 1990s, according to a Moody’s analysis authored by Zandi. Spending among the top 20% grew by about 4% after inflation in Q1 2026, while that of the bottom 80% was unchanged, a K-shaped dynamic that has persisted since the pandemic.

Wealthy households hold the vast majority of stocks and tend to spend more liberally when the market is booming, thanks to the “wealth effect.” That is the tail wagging the dog, and it cuts both ways.

What could break it

Employers are hiring at the slowest pace in more than a decade outside of the pandemic, labor force participation remains near its lowest level in nearly 50 years excluding Covid-era disruptions, and long-term unemployment has continued to rise. Inflation also remains well above the Fed’s target, pressuring household budgets.

“If AI stocks hit a skid, the economy would be in big trouble because of how soft it is,” Zandi said. Translation for traders: the AI trade is not just a sector story anymore, it is the macro story.

Options market and stocks to watch

The names driving the divergence are also the ones most exposed if the AI trade wobbles:

• NVDA: watch for flow around any shift in hyperscaler capex guidance, since semis sit at the center of the earnings-growth concentration.
• MSFT, AMZN and GOOGL: watch cloud growth prints and AI monetization commentary; these are the hyperscalers holding up index earnings.
• SPY and QQQ: watch for skew and put demand as concentration risk builds in tech.
• XLP: watch as a tell on the bottom-80% consumer that is not participating in the wealth effect.

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