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As major stock indices continue to chop around near their all-time highs, the sector rotations underneath the surface have been telling a compelling story.

You better not be betting against the consumer going into 2026. The CPI data from earlier in the week came in way cooler than expected. Crude oil prices are breaking down. Important consumer bellwether and retail stocks are hitting multi-year highs.

Does the market know something the public hasn't caught onto yet? It wouldn't be the first time that happened. Understanding what's driving these signals requires looking at the split in the American economic reality right now.

We know that there are two separate economic realities in America. It's split along the 10%/90% lines, at least when it comes to the reported data.

Consumer spending is no joke. It makes up around 70% of the U.S. economy. The type of spending that goes on in the top 10% is much different than what goes on in the bottom 90%. Despite all the doomers and gloomers out there, the market seems to be saying that the situation is going to be getting better for the bottom 90%. And yes, it will be good for the top 10%, too.

First, let's look at the market evidence before war-gaming a potential economic story.

1. The Consumer Discretionary Sector (XLY) Hit a New All-Time High
 

Amazon accounts for 7%-10% of overall U.S. retail sales volume. When combined with Tesla's weight in this index, that's significant buying power pushing higher.

2. Equal-Weighted Consumer Discretionary Sector (RSPD) Approaches a New All-Time High
 

It's not there yet, but the trend is clear. Individual retail stock names like Kohl's (KSS), Victoria's Secret (VSCO), American Eagle (AEO), and GAP (GAP) have come back to life recently.

Why would these names be bidding if the consumer was going to be stuck in dire straights?

3. Crude Oil's Back to February-2021 Levels
 

Energy relief is on the way. Most people will spend the savings on other items. This sets up an interesting dynamic for 2026. Don't forget about those stimulus checks that are supposed to be coming next year on top of the recently announced "warrior dividends" last week.

Money is going to be on the move in 2026.

Inflation is not spiking right now, but this increased spending speed that's coming sows the seeds for the next round of inflation. By this time next year, odds are we'll be having a much different conversation. But for now, this is the story the market is telling. Ignore it at your own peril. I'll keep you posted.

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