The US stock market has remained surprisingly resilient, brushing off tariffs, political turmoil, and weak job growth — and in the process, it may be helping to keep the economy from slipping into recession.

Recent data offered an unexpectedly upbeat picture: consumer spending and income rose strongly in August, durable goods orders held firm, and new home sales hit a three-year high. Inflation has also remained relatively soft, easing pressure on households.

In earlier years, these gains were largely fueled by trillions in pandemic-era stimulus and ultra-low interest rates from the Federal Reserve. Now, however, the momentum is being sustained by the “wealth effect” — with surging stock indexes boosting household confidence and spending power, even as valuations stretch higher.

While markets are propping up growth for now, analysts warn that this dependence on Wall Street is risky. If equities falter, the wealth effect could reverse quickly, dragging consumer demand and the broader economy down with it.