Even Rich People Are Starting to Get Nervous About Trump’s Economy

If U.S. stock prices continue to fall, wealthy consumers could slow their spending, putting further pressure on the U.S. economy and markets.

That could mean everything from fewer luxury cars and handbags being sold to reduced demand for top-end homes and fancy vacations.

Broadly, retail sales rose a less-than-expected 0.2% in February from January, the Census Bureau reported earlier this week. There are signs affluent consumers are holding back, too. Major airlines cut their guidance for the first quarter last week on expectations of weak demand. And U.S. credit-card spending on top luxury brands declined 5% year over year in February, Citi reported on March 11.

Though it’s “too early to tell” whether spending will contract, every dollar decline in the value of assets, such as stocks or real estate, leads to a two cent decline in spending among “upper-end consumers,” according to Joseph Brusuelas, chief economist at RSM U.S.

Brusuelas’ calculation describes the so-called negative wealth effect, when a decline in investment portfolio value affects consumer attitudes toward how much they can spend.

Today, the S&P 500 is struggling, down just over 1% on Tuesday , leading to a 4.5% decline year to date, after slipping into correction territory last Thursday.

Even that 10% decline doesn’t mean a pullback in spending by the affluent is imminent, Brusuelas told Barron’s .

But the “volatility, uncertainty, complexity, and ambiguity,” in geopolitical, economic, and market news coming out of the U.S. doesn’t bode well for luxury spending in particular, according to Erwan Rambourg, global head of consumer and retail research at HSBC.

“Luxury demand is holding up in the U.S., but I’m not sure for how long,” Rambourg told Barron’s . “There might be a lag between the data points, the markets, and the actual spending.”

In addition to sharp declines in stocks and cryptocurrency since mid-February, affluent Americans are facing a decline of 5.39% in the value of the U.S. dollar against the euro this year. By contrast, the euro lost 6.2% against the dollar last year.

The dollar’s decline not only affects the price of luxury goods—many of which are made in Europe—but the desire of U.S. consumers to travel and spend across the Atlantic, according to HSBC.

Another challenge is the uncertain trajectory of tariffs on goods from Canada, Mexico, and Europe.

“I’ve always thought that you bought luxury not because you were wealthy, but because you were confident about the future,” Rambourg said. “The whole tariff conversation—the reversals on Canada and Mexico—one day it’s 25%, the following day it’s postponed by a month, the following day, you have some exceptions…if you’re a business manager and if you’re a consumer, obviously that will affect your confidence in a big way.”

Still, wealthier consumers have a significant buffer in their investment portfolios, which have grown substantially over several years of upward equity returns, according to Katie Nixon, CIO of Northern Trust Wealth Management.

“In any given year, you expect to have 5% pullbacks almost routinely,” Nixon said. “It’s just that we haven’t had one in a while so this feels kind of extreme.”

Investors know that markets can fall significantly, as happened during the financial crisis in 2008 or during the early days of pandemic, according to Scott Zelniker, private wealth advisor at UBS Wealth Management. “More often than not, the market was up significantly 12 months later,” Zelniker told Barron’s .

One topic of conversation among Zelniker’s clients, however, is whether to buy the cars they are leasing when their agreements expire instead of re-leasing them as usual, considering the potential for tariffs to lead to higher-priced automobiles, he said. “They already have a contract with a price.” Why buy, or lease, a new car?

Gold is one of the market’s go-to hedges in rocky times. Don’t forget that gold miners’ stocks are too.

The stock market’s gains in 2026 belie the rocky macroeconomic picture: elevated inflation, heightened geopolitical tensions, and jitters about the artificial-intelligence trade. That backdrop, in theory, should be the time for gold to shine. Instead, the price of the yellow metal has tumbled more than 5% so far, after last year’s blistering 65% rally. In part, the U.S. dollar’s recovery has stymied gold, which benefited from the greenback’s weakness in 2025.

Even with the precious metal’s recent weakness, gold mining stocks could be the best way to profit from this year’s uncertainty.

Gold miners “are a valuable hedge against macro risks that would likely be damaging for equities,” BCA Research’s Noah Weisberger and Rishabh Shah wrote this week.

Concerns about the Federal Reserve’s next moves to tackle inflation, the increasingly crowded AI trade, and steep valuations for tech stocks are just some of the drivers that could help gold’s price get on even footing— and lead to even bigger gains for miner stocks.

These stocks’ prices tend to outpace gold’s moves, because the companies have fixed operational costs. So when gold’s price rallies, their profit margins soar, and vice versa. For instance, the VanEck Gold Miners GDX +7.39% exchange-traded fund has fallen 11% this year as the metal has slumped.

Now, gold’s price just needs to stabilize to help miners’ stocks take off, and that seems to be happening. The precious metal has recently found support above the $4,000 level, and has stuck in a narrow range since the end of June. But its price rose ever so slightly in July, ending a four-month losing streak for the metal. Technical analysis also suggests that gold is due for a comeback.

Barron’s recently wrote that the pullbacks for both gold miners and the metal itself are overdone. Senior technical analyst Doug Busch noted that the VanEck ETF is on the “verge of a breakout” and has the potential to hit $11o in early 2027, up more than 40% from its current price.

Gold miners also have more than their role as a market hedge going for them. Their fundamentals are solid, too, says Chris Mancini, portfolio co-manager of the Gabelli Gold Fund.

“Precious metals miners are generating substantial amounts of free cash flow given profit margins of over $2,000 per ounce, and are returning this cash to shareholders through buybacks and dividends,” he said in an email.

“Buying the miners is a cheap way to get exposure to the price of gold,” he added. His fund owns Newmont NEM +6.71%, a Barron’s stock pick last year, and Agnico Eagle Mines as top holdings, as well as miners Northern Star Resources, Endeavour Mining, and Kinross Gold K+8.59%.

Miners are better businesses than they used to be, the BCA team added.

“Capex is more disciplined, margins are high and rising…and they are largely independent of the AI story,” Weisberger, BCA’s head of equities, and Shah, a senior analyst, wrote.

That last part is key. AI is disrupting the software industry and many other services and information-oriented businesses, and investors have piled into AI stocks. But ChatGPT, Claude, Grok, and other large-language models aren’t going to replace the need to mine for metals.

“Equity portfolios can benefit from exposure to quality that is uncorrelated to AI risk, and gold miners fit the bill,” the BCA team said.

They recommend that investors buy the VanEck Gold Miners ETF, which owns top miners such as Agnico, Barrick Mining ABX +7.24%, and Newmont.

An important bonus for big gold miners’ stocks is that their valuations are attractive after the gold’s pullback, too. The VanEck ETF is now trading at just a little more than nine times next year’s earnings estimates. That’s a big discount to its five-year average price-to-earnings ratio of 14, according to FactSet.

What’s more, the ETF is currently valued at a more than 50% discount to the S&P 500 SPX -0.17%, which is trading for about 19 times earnings estimates for 2027. Mining stocks have typically traded at just a 25% discount to the broader market over the past five years. So there is significant upside for the group if valuations move back toward normal levels.

One factor that complicates mining stocks as a market hedge, of course, is if stocks bounce back, which has been the case so far in August.

But both the market and economic outlooks remain cloudy, and investors remain nervous about the Fed’s next moves and AI stocks. Gold miners should do just fine, even if the anxious mood on Wall Street persists.