The rising cost of capital for companies today is starting to spook the stock market: ‘The worry is the spending might not pay off'

Alphabet plans to increase spending on its AI build-out, but the market backdrop is becoming harder to underwrite. The article cites the Iran war risk, oil back around $100/bbl, and rising bond yields as key headwinds to risk appetite. Overall, the incremental AI capex is supportive for long-term positioning, but near-term sentiment appears cautious given macro pressure from rates and energy.

Analysis

Alphabet plans to increase spending on its AI build-out, but the market backdrop is becoming harder to underwrite. The article cites the Iran war risk, oil back around $100/bbl, and rising bond yields as key headwinds to risk appetite. Overall, the incremental AI capex is supportive for long-term positioning, but near-term sentiment appears cautious given macro pressure from rates and energy.