Wall Street has had plenty of reasons to decline in recent months. US bond yields surged to over two-decade highs, oil traded above $100 a barrel for part of the period, the Federal Reserve raised interest rates, and investors continue to worry about the massive price tag of the artificial intelligence race.
Yet, the market simply refuses to fall. The S&P 500 ended Friday less than 1% away from its record high, while the Nasdaq remained near an all-time high. A weaker-than-expected employment report even significantly lowered the chances that the Fed will raise rates in October, giving stocks an additional tailwind.
It is a confusing picture, because behind the indexes themselves, something else is happening.
Nike, McDonald's, and Pepsi are not joining the party.
Nike is perhaps the most striking example. The stock has fallen by nearly 80% from its 2021 peak and recently hit a 12-year low. Since the beginning of 2026 alone, it has lost nearly half its value. The company is still dealing with weakness in China, eroding sales, reliance on promotions, and growing competition from brands like Adidas and On.
McDonald's is also feeling the pressure. The company recently warned that customer traffic in key markets is expected to remain weak and announced an $8.5 billion investment plan in an effort to restore growth and assist franchisees. The stock has dropped by about 22% since the start of the year.
PepsiCo is trading more than 25% below its annual high. Well-known names such as Starbucks, Lululemon, leading alcohol producer Diageo, and other consumer goods companies are also struggling to attract the same investor affection they received in the past.
So how are the indexes still so strong?
The answer lies mainly in the mega-cap companies. Nvidia, Microsoft, Apple, Meta, Amazon, and the rest of the AI stocks continue to draw massive amounts of capital. Their success is large enough to compensate for weakness in other parts of the market.
This also explains why the index can look great while a large portion of the stocks within it are struggling. Last week, hundreds of stocks on the New York Stock Exchange recorded new annual lows, while only a few reached new highs.
And there is another competitor: US government bonds. The 10-year US Treasury yield is still around 5.25%, after reaching 5.34%, its highest level since 2002.
For the investor, the meaning is quite simple: A company like PepsiCo or Nestle, which grows slowly and pays a dividend, must now compete with a US government bond that offers more than 5% without similar business risk.
Investors continue to wait for the "crash," but in parts of the consumer market, it has already happened. The big question for the coming months is not only whether AI stocks will continue to hold the indexes at peak levels, but whether the companies behind them have merely managed to hold out against high interest rates, or if the consumer is already starting to wear thin.