Mitchell Hartman

Sam Stovall is chief investment strategist at CFRA Research.

So far, only consumer staples and health care are in the green.

You know the old saying that when the going gets tough, the tough go eating, smoking, and drinking.

And if they overdo it, they have to go to the doctor.

Those are your traditional safe havens.

The rally that led to yesterday's record highs, though, was much broader.

Even as investors have pulled back a bit from high-flying AI-related stocks, they've plowed into others, says Gary Schlossberg at the Wells Fargo Investment Institute.

We're starting to see a rotation into other sectors of the market.

We're favorable on financials, industrials.

Meanwhile, the AI boom is boosting companies involved in the AI build-out, says Jed Ellerbrook at Argent Capital Management.

A lot of industrial companies and energy companies, second and third derivative beneficiaries of AI investment.

Taken all together, says Ellerbrook, we're seeing... This is a strong, balanced stock market rally.

And maybe that's a little bit surprising given all the economic uncertainty, the policy uncertainty on tariffs and interest rates and all the rest this year.

But remember, says Sam Stovall, the stock market anticipates the economy by about six or so months.

Economic growth in 2026 will likely increase and that will filter down into retail sales, consumer confidence, etc.,

All the extra wealth from stock gains and tax refunds will juice the consumer economy, says John Lear at polling firm Morning Consult, though not for all consumers.

Stock market growth has been a really strong driver of consumer sentiment for high-income consumers.

And it's one of the reasons that we're experiencing this K-shaped economy right now, this divergence between

the divergence between higher-income and lower-income consumers, who mostly don't own stocks and whose jobs and wages are increasingly at risk.

Lear says stock gains make people who own stock feel richer and spend more.