April Savings Rate Crash to 2.6% Threatens S&P 500 Rally

Fresh April data released on May 30 show the U.S. personal savings rate collapsing to 2.6%, its lowest level since June 2022, as consumers continue to outspend income growth. Core retail sales rose 5.7% year-over-year while personal income advanced just 2.5%, marking the twelfth straight month of this imbalance and leaving households with shrinking buffers. Headline PCE inflation printed at 3.8% and core at 3.3%, reinforcing sticky price pressures that could delay Fed rate cuts and expose discretionary spending to retrenchment, thereby pressuring S&P 500 valuations despite recent record highs.