The Stock Market is at Record Highs Again. Can This Really Keep Going?
The US economy grew at an annualized rate of 2% in the first quarter, driven by business investment in AI data centers, while consumption slowed. The Federal Reserve, European Central Bank, and Bank of England delivered hawkish messages amid rising energy prices and inflation.
The US economy grew at an annualized rate of 2% in the first quarter, up from 0.5% in the previous quarter. Business investment, particularly in AI data center construction, drove the growth, contributing 1.39 percentage points to the headline figure. Consumption, however, decelerated from its peak in the third quarter, contributing only 1.08 percentage points. AI 'hyperscalers' announced large capital expenditure plans, but energy prices and tariffs may hinder their realization. The Federal Reserve, European Central Bank, and Bank of England delivered hawkish messages amid rising energy prices and inflation. The S&P 500 is at record highs, but technical issues and negative divergence in the relative strength index momentum gauge raise concerns about the sustainability of the upward trend.
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