Stocks are reaching record highs primarily due to excitement over artificial intelligence, which obscures warning signs of a slowing economy. Analysts warn that while AI-related earnings are boosting aggregate data, cyclical sectors are showing signs of recession, prompting investors to diversify and hedge.

The U.S. economy's growth is heavily reliant on AI investments, with data centers significantly boosting GDP figures. Despite a reported recovery, the underlying economy shows weakness as non-AI sectors struggle to grow, raising concerns about long-term sustainability without broader economic support. The article emphasizes that while AI infrastructure is booming, the overall economic landscape remains narrow and vulnerable.

JPMorgan Chase is launching a decade-long initiative to invest up to $10 billion in key industries deemed crucial for U.S. national security, including defense, aerospace, advanced technologies, and energy. The initiative aims to provide $1.5 trillion in funding and addresses concerns over reliance on foreign sources for critical materials and products amid rising tensions with China. CEO Jamie Dimon emphasized the importance of strengthening America's economy and reducing regulatory obstacles.