S&P 500 Hits Record as Softer Inflation Tempers Rate Fears
Updated
Updated · Yahoo Finance · Aug 16
S&P 500 Hits Record as Softer Inflation Tempers Rate Fears
3 articles · Updated · Yahoo Finance · Aug 16
Summary
Another subdued US inflation week helped lift the S&P 500 to a fresh all-time high, while the Nasdaq 100 moved within 2% of its first record since early June.
Lower consumer and producer price readings reduced expectations of a Federal Reserve hike next month, easing the rate pressure that typically weighs hardest on richly valued technology shares.
That relief may be fragile: inflation still sits above the Fed’s 2% target, traders still price at least one hike by year-end, and 30-year Treasury yields remain near their highest since 2007.
AI spending is sharpening that risk because Alphabet, Amazon and Meta already carry about $80 billion in bonds due 2056 or later and, with Microsoft, are projected to spend $740 billion on AI infrastructure in 2026 and $1 trillion in 2027.
If relentless government deficits and massive AI borrowing dictate long-term yields, has the Federal Reserve secretly lost control of the bond market?
Will the trillion-dollar collision between massive AI infrastructure debt and staggering U.S. Treasury refinancing permanently break historical bond market dynamics?
Could the staggering $1.5 trillion in tech infrastructure commitments unexpectedly trigger a historic crisis for long-term investors if the AI boom cools?