U.S. economy rebounded in first quarter, driven by sizzling-hot business investment

The U.S. economy rebounded to a 2.0% annualized GDP growth rate in Q1, led by a 17.2% surge in business equipment spending tied to artificial-intelligence investment, a 1.6% rise in consumer spending and a 4.4% bounce in government outlays. The print missed consensus (2.2%) but signaled continued underlying resilience; Fed Chair Powell noted the economy’s durability. Market reaction was modestly positive: the US SP 500 was set to open higher and the 10-year Treasury yield eased to about 4.39%, reflecting a risk-on tilt and reduced near-term rate fears. Overall, the data supports a constructive outlook for equities—particularly cyclicals tied to AI capital spending—while keeping inflation and Fed policy vigilance in focus.