Despite rising prices, American consumers continue to spend their wages. At a time when diesel prices are close to historic highs, they are still buying pickups; beef prices have soared, and they are still enjoying steak meals. This is certainly good news for the economy and the market, but Wall Street is worried that this situation will be difficult to sustain. Retail sales and personal consumption expenses continue to grow, but the scale of consumer borrowing is also rising at the same time. Meanwhile, continued high oil prices and rising US Treasury yields have hit consumer sentiment hard. The preliminary consumer confidence index released by the University of Michigan on Friday fell to a five-month low, while inflation expectations rose further. All of this has made Wall Street even more worried. This consumer spree is coming to an end, thus removing the important pillars that support the operation of US stocks near historic highs. Eric Clark, Chief Investment Officer at Accuvest Global Advisors, said: “Consumers can't afford rising prices forever. Most of the time, wage growth doesn't keep up with the inflation we are experiencing, which forces consumers to make trade-offs.”

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