1. Increased consumer stress due to inflation and higher interest rates reported by FICO. 2. Financial strain on borrowers may impact spending and S&P 500 companies' revenue.
Higher consumer stress and financial strain typically lead to reduced spending, impacting S&P 500 earnings. Historical instances, such as during the 2008 financial crisis, show that elevated consumer debt negatively correlates with market performance.
The article discusses fundamental economic conditions that can directly influence consumer behavior and, consequently, corporate profits in S&P 500 constituents.
Consumer stress due to rising inflation and interest rates will likely affect spending in the near term. Previous trends indicate that sales in consumer-reliant sectors feel immediate pressure from such financial strain.