The S&P 500 just printed a 53% surge in per-share earnings, year over year. Sales climbed nearly 16%. Nearly twice as many firms in the index raised forward guidance as cut it. Tariff refunds — millions at Abercrombie and Garmin, nearly three billion at Walmart alone — are flowing primarily to corporate bottom lines. The bulls are calling this the opening of a generational cycle. They have the receipts. They do not have the country.
I know this story from the other side of the glass. I spent years at a Chicago commodities desk pricing the futures on the corn those earnings represent, watching the screens, watching the money move. The men who run the S&P 500 companies are not stupid. They know what this quarter is. It is a one-time harvest: tariff refunds returned to the corporate bottom line; AI capex fueling capital-goods demand; federal spending elevated; and an equity market near records pumping household balance sheets through the wealth effect. Every one of those inputs is real. Every one of them is borrowed from somewhere else.
But read the lineup. Read it slowly. Walmart — the giant of giants — posted comparable-sales growth at its slowest pace in more than six years and still raised full-year guidance after booking roughly $2.9 billion in tariff refunds and routing a chunk of that money into price cuts. Dollar General, which serves the most cash-strapped shoppers in America, posted a fifth straight quarter of higher traffic and a 3.5% comparable-sales gain. Its CEO, Todd Vasos, told investors on the call: “Our core customers continue to be financially constrained.” Then he raised full-year guidance. That is the economy they are selling you: a company whose customers are stretched to the limit, raising its outlook because Washington returned a public collection to the corporate bottom line.
The pattern holds across the cohort. Abercrombie & Fitch raised full-year guidance on the strength of an expected $120 million in tariff refunds and a customer base that CFO Robert Ball said “performed above our expectations.” Garmin booked $21 million in refunds and pushed margins higher; CEO Clifton Pemble called the gross-margin performance “impressive by any historical comparison.” Deere, McKesson, Charles River Laboratories, J.M. Smucker, Best Buy — the breadth of the upgrade list is the story, and the story is a refund cycle.
Strip out the one-time equity-stake gains at Amazon and Alphabet that juiced the headline number, and S&P 500 earnings still rose by the largest amount since the fall of 2021. The underlying earnings power of Corporate America is the strongest it has been in nearly five years. Torsten Slok, Apollo’s chief economist, put the right shape on it this past week: “As long as the AI boom continues and the stock market continues to be elevated, and we continue to have strong consumer income growth, the consumer will continue to be in good shape.” The conditional is fair. The condition is borrowed. The consumer is in good shape because the equity market is elevated; the equity market is elevated because the AI capex is rolling in; the AI capex is rolling in because the firms at the top can borrow against their own concentration. Lift any one of those legs and the picture changes.
This is what they mean when they call it a boom. The 53% is concentrated in the S&P 500 — the most consolidated cohort in American business. The companies at the top are extracting more from a customer base that, by the CEO’s own admission, cannot afford what it is buying. The tariff refund is not a “tailwind.” It is a redistribution: the government collected tariffs, and the money flowed back to the corporations. Apollo’s mid-August estimate puts the refunds at more than 4% of third-quarter economic growth — roughly 0.2 percentage points added to the Atlanta Fed’s already-strong 4-to-5% forecast. That is not a tailwind. That is a transfer. The AI capex is real — but the wealth it creates is captured by the firms and the households that own the equities, while the workers it displaces bear the rest. The wealth effect means the economy runs on making the rich richer so they can spend, while working families get price cuts funded by corporate tax refunds and the asset inflation of a near-record market.
Headline consumer data has flickered red. The Conference Board’s confidence index slipped in August. July retail sales softened, partly because retailers pulled summer promotions forward into June. The bears have pointed at those numbers as proof the boom is a lie. They are half right. The boom is real at the top. The strain is real at the bottom. Both are true at the same time, and the men in the towers above the trading floor know it. That is why the guidance is being raised, not because demand is strong, but because the refunds are flowing and the equity market is bid. When the bid goes, so does the “consumer in good shape.”
This is what you conserve when you conserve the S&P 500. You conserve the financialized extraction of the last forty years. You conserve the same architecture that hollowed the rail towns and the mill towns and the family dairy farms and converted Adams County from a working place into an amenity for other people’s portfolios. You conserve the system in which a company raises guidance while its customers cannot pay their bills, and the analysts call it a “beat.” You conserve the game in which the Bulls is a title given to men who have learned to read the tape that runs over the towns they have helped empty.
The alternative is not complicated. It is harder. It is the cooperative economy — the farm co-op I run, the credit union on Main Street, the mutual insurer that belongs to its policyholders. It is widely distributed ownership: every farmer with a vote, every member with a share of the surplus, every community with a firm that answers to it. It is the building the bulls’ quarter will not build: a wage a family can live on without depending on the wealth effect; a Main Street that is not a backdrop for someone else’s portfolio; a local economy that produces what it consumes and keeps the surplus at home. It is the answer to the question the 53% will never ask — what does it profit a country if it gains the whole S&P and loses its own people?