S&P 500 ETF Rises 1.92% as AI Data Center Build-Out Fuels Growth
SPY closed up 1.92% on Friday as investors eyed AI infrastructure driving nearly half of economic growth, per economist Justin Wolfers. Wolfers argued that AI-related capital investment in data centers, rather than workforce automation, has driven recent gains and that most US businesses have yet to integrate AI into workflows.
1. SPY Friday Performance
The S&P 500 ETF rose 1.92% on Friday, pushing its year-to-date return to 1.97% as broader indexes rallied. U.S. futures dipped on Monday following the positive session.
2. AI Layoff Myth Commentary
Economist Justin Wolfers asserted that the surge of corporate downsizing is largely standard management trimming rather than true AI-driven displacement, citing minimal AI integration in current workflows. He compared the situation to early ATM adoption, noting workers adapted rather than being replaced.
3. Data Center Investment Impact
Capital expenditures on AI infrastructure have underpinned nearly half of the past year's economic growth, Wolfers noted, with data center construction accounting for the bulk of this activity. This highlights a focus on physical build-out rather than immediate labor automation.
4. Outlook for ETF
Investors are weighing whether AI will ultimately serve as a labor substitute or productivity complement, a distinction that could shape sector performance within SPY. The current emphasis on capex over headcount may signal robust longer-term growth but poses short-term adoption risks.