Capital Economics Says AI Spending Will Fall in 2028 and Stocks Will Follow

Stocks will tumble much further as AI investment will slow next year then fall in 2028 and drag GDP down too, economist predicts

Capital Economics expects the S&P 500 will be 12% below its current level by the end of 2027, putting it 17% off its early-October peak.

Capital Economics says AI spending will fall in 2028 and stocks will follow

Capital Economics' Vicky Redwood sees $1 trillion of US AI capex in 2027 before a roughly 10% drop in 2028. Her model shows only a 0.1 point hit to GDP, but Taiwan and South Korea face far bigger drags.