A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.

The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter, as an end-of-year stock rally lifted their portfolios, according to new data from the Federal Reserve.

The total net worth of the top 1%, defined by the Fed as those with wealth over $11 million, increased by $2 trillion in the fourth quarter. All of the gains came from their stock holdings. The value of corporate equities and mutual fund shares held by the top 1% surged to $19.7 trillion from $17.65 trillion the previous quarter.

While their real estate values went up slightly, the value of their privately held businesses declined, essentially canceling out all other gains outside of stocks.

The quarterly gain marked the latest addition to an unprecedented wealth boom that began in 2020 with the Covid-19 pandemic market surge. Since 2020, the wealth of the top 1% has increased by nearly $15 trillion, or 49%. Middle-class Americans have also seen a rising wealth tide, with the middle 50% to 90% of Americans seeing their wealth increase 50%.

Economists say the rising stock market is giving an added boost to consumer spending through what is known as the “wealth effect.” When consumers and investors see their stock holdings soar, they feel more confident spending and taking more risk.

“The wealth effect from surging stock prices is a powerful tailwind to consumer confidence, spending and broader economic growth,” said Mark Zandi, chief economist of Moody’s Analytics. “Of course, this highlights a vulnerability of the economy if the stock market were to falter. This isn’t the most likely scenario, but it is a scenario given that stocks appear richly (over) valued.”

Yet, the latest report also highlights how top-heavy stock ownership remains in the U.S. According to the Fed report, the top 10% of Americans own 87% of individually held stocks and mutual funds. The top 1% own half of all individually held stocks.

Economists say a rising stock market brings outsized benefits to the wealthy, mainly boosting the high end of the consumer and spending markets. The wealth of middle-class and lower-income Americans depends more on wages and home values than stocks.

“Those households in the top one-third of the income distribution and who own the bulk of the stock holdings account for approximately two-thirds of consumer spending,” Zandi said.  

Liz Ann Sonders, chief investment strategist at Charles Schwab, said stocks represent a growing share of the assets of the top 1%. Stocks accounted for 37.8% of the overall share of household assets for the top 1% at the end of 2023, up from a recent low of 36.5%.

Yet because the wealthy don’t need to spend as much of their gains – a phenomenon known as the marginal propensity to consume – Sonders said the added stock wealth for the 1% may not have a substantial impact on the consumer economy.

She noted that consumer confidence among those making more than $125,000 a year has been in “secular decline” since 2017, according to the Conference Board.

“While the bump in stock prices might link to stronger confidence, it doesn’t necessarily point to stronger spending at the higher end,” she said.

With the S&P 500 already up 10% this year, it is likely that the wealth of the upper echelon has already topped the record at the end of 2023. While inequality declined slightly in 2021 and 2022, as wages increased and housing prices surged, the wealth gap has since crept back to pre-pandemic levels.

The top 1% accounted for 30% of the nation’s wealth at the end of the fourth quarter, while the top 10% accounted for 67% of all wealth.

Sign up to receive future editions of CNBC’s Inside Wealth newsletter with Robert Frank.