The Dow Jones Industrial Average closed at 50,115 Friday, crossing 50,000 for the first time. Unemployment stands at 4.4%. Job growth fell from 200,000 to 50,000 monthly. Fed Chair Jerome Powell stated revised employment data may show the United States has been losing jobs since April.
Chip companies drove the rally. Nvidia jumped 7.8%, Broadcom climbed 7.1%, Advanced Micro Devices rose 8%. Big Tech spent $630 billion on AI infrastructure in 2025. Amazon announced $200 billion more. In Q2 2025 alone, Amazon Web Services, Microsoft Azure, and Google Cloud spent $87 billion building data centers—quarterly spending exceeding the annual GDP of 140 countries. AI-related services revenue reached $25 billion in 2025. They’re spending ten times projected returns.
The same day, Stellantis announced a $26 billion charge from canceling EV projects. CEO Antonio Filosa blamed “over-estimating the pace of the energy transition.” Ford took $19.5 billion in charges. General Motors took $7.6 billion. Combined, Detroit’s Big Three booked $52.1 billion from overestimating EV demand. Their total 2024 profits were $34.1 billion. Stellantis shares fell 27%. The company expects a net loss for 2025, suspended its 2026 dividend, and sold its stake in a Canadian battery plant to LG Energy Solution for $100—a complete write-off of its $980 million investment.
One technology transition admitted failure while investors doubled down on another. Goldman Sachs projects 2.6% GDP growth for 2026 but unemployment remaining at 4.5%. Philadelphia Fed President Anna Paulson called it “strong GDP growth happening against the backdrop of a slowing labor market.” Job growth turned modestly negative through the first quarter of 2026. Federal government employment saw the sharpest drop, but private sector employment also moderated.
Companies are “increasingly discussing layoffs and appear eager to use AI to reduce labor costs,” according to Goldman Sachs economists. They estimated firms could be “reluctant to hire in anticipation of AI being able to replace workers in the near future.” The AI spending driving stock valuations may be suppressing the employment that GDP growth typically generates.
Market capitalization measures investor belief about future cash flows. Nvidia’s $4.51 trillion valuation would rank it 4th globally, but its annual revenue runs $130-140 billion—ranking between 30th and 35th by GDP. The valuation reflects what investors think AI chip dominance will generate over decades, not current production.
The week started with $285 billion evaporating from legal tech stocks after Anthropic released Claude Cowork. Thomson Reuters fell 16%, RELX dropped 14%, LegalZoom crashed 20%. Wall Street assessed capability despite liability disclaimers. Detroit admitted overestimating EV demand. Investors bet AI delivers where electric vehicles failed.
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