The S&P 500 notched a record, up 14% from its late‑March low as earnings from Google, Caterpillar and Eli Lilly buoyed sentiment and oil prices fell. Yesterday’s GDP report posted a 2% real growth rate, a touch below the 2.2% forecast but still respectable. Consumer spending slipped to a 1.6% pace, down from 1.9% in the prior quarter, suggesting households are edging toward strained budgets.

Private fixed investment surged, driven by digital equipment and software even as data‑centre construction fell. Analysts warned that AI‑related capex alone cannot shield the economy from recession, noting that imported chips used in those projects subtract from GDP calculations. Historically, tech investment has tracked robust consumer spending, but current data suggest AI spending now outpaces the consumption pillar that traditionally underpins it.

Both the European Central Bank and the Bank of England left rates unchanged, the ECB at 2% and the BoE at 3.75%, as energy price spikes from the Iran conflict filter through their economies. Central bankers argue shocks merit a response, but markets price in up to three rate hikes by year‑end. Investors should watch how lingering energy costs reshape inflation expectations and corporate margins.