S&P 500 futures are flat this morning, premarket, suggesting that investors are not in a mood to sell after the index reached yet another all-time high yesterday. The S&P was up 0.32% on the day, at 6,466.58.
A lot of that growth has come from the Magnificent 7 tech stocks.
“The S&P 500 is up 10% year-to-date, powered by the ‘Magnificent Seven’ tech giants whose foreign-heavy revenues are being boosted by the weaker dollar. Concentration in the top 10 stocks is at its highest since the 1960s, with earnings strength—83% of companies beating estimates—driving sentiment,” said Convera’s Kevin Ford in a note to clients this morning.
The vast wave of capex spending generated (and received) by those companies—on data centers, servers, software, and other types of IT kit—is showing up in the macro data too.
AI spending has added half a percentage point to GDP growth in the first half of this year, according to Samuel Tombs and Oliver Allen of Pantheon Macroeconomics.
“We estimate that GDP would have grown at a mere 0.6% annualized rate in the first half were it not for AI-related spending, clearly weaker than the reported 1.1%. Big Tech’s plans to continue spending aggressively on AI over the next few years suggest a similar boost over the rest of 2025 and into 2026.”
While it’s difficult to estimate how much all this spending is worth, it’s certainly in the hundreds of billions of dollars. Pantheon’s charts show spending on all types of computers and IT kit approaching something like the better part of $1 trillion this year.
Here’s a snapshot of the action prior to the opening bell in New York:
