Compiled by the editorial desk with reference to official statements, public filings, and industry data.

The US economy is posting headline-grabbing numbers, with the S&P 500 notching 15 record closing highs this year and the Nasdaq Composite 17. Microsoft recently became the second company ever to reach a $4 trillion valuation, weeks after Nvidia hit that milestone first. Yet these figures obscure a more troubling reality for many Americans: outside the tech sector, the economy is showing signs of deep stagnation.

A closer look at the data reveals that the stock market's performance is heavily concentrated in a small group of tech giants. According to a Financial Times analysis, while most sectors saw stock gains, actual corporate profits are falling. The so-called 'magnificent seven' — Nvidia, Amazon, Google, Tesla, Microsoft, Apple, and Meta — are effectively dragging the rest of the S&P 500 along, masking underlying weakness.

CNBC analysis indicates that 26 percent of the S&P 500's explosive growth in the last three months came from lavish spending on these seven companies. Without that spending, the market would be essentially flat. As TradeSmith editor Michael Salvadore put it, AI has essentially 'bailed out the stock market… its investors… and the Federal Reserve.'

Beyond the Headlines: GDP and Profits

The stock market is not the economy, and the gap between the two is widening. The Financial Times reports that corporate profits for small and medium-sized businesses hardly grew in the second quarter compared to the same period last year. GDP growth, which came in at 3 percent between Q1 and Q2, is also heavily dependent on AI investment. Economist Paul Kedrosky estimates that a staggering 40 percent of that growth came from AI-related spending — money that, so far, has not generated significant returns.

Kedrosky argues that AI spending is effectively a 'massive private sector stimulus program.' By channeling billions into tech, this investment is not being directed toward other sectors of the economy. The trend is intensifying: the AI contribution to GDP growth is increasing, even as the technology itself has yet to prove profitable for most companies.

Workers Feel the Strain

For everyday workers, the picture is far less rosy. A dismal July jobs report showed a slowing labor market, with fewer opportunities and rising unemployment. Household incomes are stagnating even as corporate profits climb. These trends predate the AI boom, indicating deeper structural issues.

Meanwhile, inflation remains a contentious issue, caught between the Federal Reserve's interest rate policies and the potential impact of tariffs proposed by former President Donald Trump. The combination of high tariffs and Fed decisions could push prices higher, squeezing consumers further.

As these factors converge, consumer spending is expected to weaken in the second half of the year. In a capitalist economy, reduced spending can trigger a downward spiral, affecting businesses and jobs.

The current situation echoes the late 1970s, when President Jimmy Carter faced similar economic malaise, driven by concentrated industrial power. Back then, the response led to high unemployment and increased inequality, ultimately shifting power from industrial monopolies to financial capital.

Today, the AI boom serves as both a lifeline and a smokescreen, propping up the market while hiding the rot beneath. The gains of 2025 are largely inaccessible to ordinary Americans, who face fewer job opportunities, stagnant wages, and rising costs. If this pattern persists, the economy may soon confront the same hard truth that haunted Carter's America: an economy too concentrated in the hands of a few can only fake it for so long.