S&P 500 reaches record levels as AI-driven bubble fuels market concentration

On Thursday the S&P 500 closed virtually unchanged, slipping 0.01% to 7,357.49 points after an intraday high of 7,419.08 and a low of 7,323.50. The index is up about 7.3% year‑to‑date, having hit a recent peak of 7,620.90. Over the past five years the index has risen roughly 80%, prompting analysts to warn of a potential new economic bubble comparable to those of 1973 and 2008.

Tech firms centred on artificial intelligence dominate the market, with companies such as Nvidia, Google and BlackRock controlling a large share of the capitalisation. AI‑related activities now represent about 35% of revenue for leading tech players, while the sector’s high resource demands raise concerns about sustainability and widening income gaps. Broader economic pressures include rising food‑chain costs, inflation‑linked wage stagnation and an increase in European pensioners taking flex‑jobs to supplement incomes.