The stock market runs on its own logic, only lightly tethered to the real American economy. Things can feel really bad to consumers, workers and small businesses — even big businesses — and, at the same time, can feel fabulous to investors.
Right now, as millions of Americans are struggling to pay the monthly bills, the stock market is bullish, regularly hitting new benchmarks of success. Still, plenty of insiders at the pinnacle of the financial world are getting nervous, even as their wealth multiplies. The worry is that this golden tower is built on a thin foundation: artificial intelligence.
Just a few tech behemoths are the engine of the S&P 500’s rise. While sectors such as manufacturing and energy have grown smaller, tech companies now account for a full third of the market, a share significantly larger than tech’s piece of the pie back in 1999, just before the dot-com bubble burst.
Tech giants like Microsoft are betting the farm on AI, boosting the stock market as they dump billions of dollars into the effort to beat competitors to the vast treasure at the end of the AI rainbow.
But what if that rainbow is an illusion? What if, for some reason, this humongous bet fails to pay off?
In that event, the stock market bull gets ground into hamburger.
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