The world is crazy but stocks are up?

Stock markets are near all-time highs — even as geopolitical conflict rocks the global economy. Per Axios, Moody's offers an explanation: markets have adjusted to a fundamentally new economic regime. The evidence is hiding in the details: bond yields have risen across advanced economies, corporate investors have retreated from riskier debt, and within the stock market, a clear rotation is underway — software, autos, and consumer goods are down, while energy and semiconductors surge as investors favor stability and the picks-and-shovels of the AI boom. This shift reflects a move away from the post-financial-crisis era of cheap borrowing toward a world shaped by geopolitical uncertainty, higher government deficits, and massive AI capital expenditures. The risk: all that AI spending may not pay off, and investors are betting heavily on government intervention if turbulence rises.

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