Americans have never been this gloomy about the economy. Wall Street has never cashed in harder

The same week Americans recorded a 74-year low in economic pessimism, Wall Street’s biggest banks closed their most lucrative trading quarter since at least 2014. 

The S&P 500 punched through 7,000 to a fresh all-time high. Goldman Sachs posted its second-highest quarterly revenue on record. Morgan Stanley’s equities desk set a record of its own. JPMorgan, Bank of America, and Citigroup all notched records in stock trading.

Wall Street is riding high on the coattails of the war in Iran. But Main Street feels like it’s drowning in it. Much has been written about the K-shaped economy, but there’s something tangibly different about this particular divergence: It’s happening at a time when President Donald Trump and his cabinet are sowing enormous uncertainty and volatility around the war, and isn’t it classic wisdom that Wall Street is allergic to uncertainty? How could a conflict that has shut down one of the world’s most important oil choke points for months and triggered what the International Energy Agency keeps calling the worst energy crisis ever, not hinder the bull run?

While analysts puzzle over the question, many online say they already have the answer: Trump is manipulating the markets. What finance types call “jawboning” looks, to the average person scrolling X, like clear evidence of a president riling markets up over the weekend to create a dip—one that smart money (and Trump-associated insiders, these arguments go) will buy and ride to the top. But one top economist says the answer is simpler than that.

“Stock markets respond to risks shifting around,” said Claudia Sahm, chief economist at New Century Advisors and inventor of the famous Sahm rule for recessions. “Households respond to reality.”

Volatility is the........

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