Capital Spending & the Stock Market?

Capital Spending has long been important for both the economy and the stock market. However, with the onslaught of AI, capital spending has recently played an outsized role underlying both U.S. economic performance and the S&P 500 Index. Consequently, earlier this week investors cheered another report that U.S. core capital goods orders (i.e., new nondefense ex-aircraft capital goods orders) again rose handsomely in June. During the last year, core capital goods orders have now increased in 10 of the last 12 months and are up by a robust 12.5% during this time! U.S. Capital spending has recently been on steroids because of the contemporary race among AI companies vying for the future leadership of this new exiting endeavor.