The economy is still booming on AI spending, which is good for stock investors, but climbing bond yields are the big risk hanging over it.

• Tech business activity is growing at its fastest pace in five years, driven by companies rushing to adopt AI.
• The job market is holding up and even picking up again, which is the single most important sign the boom can continue.
• Government bond yields keep climbing toward levels that tend to break something, and stocks are mostly ignoring it.
• Yields are rising because of oil prices, the government deficit, heavy bond issuance worldwide, and countries like Japan and Saudi Arabia selling US bonds to raise cash for their own needs.
• Riskier company debt is getting more expensive to borrow, a warning sign worth watching even though it is not at crisis levels.

Outlook: Nasdaq stocks like Nvidia, Microsoft, and Meta are expected to keep pushing to new highs as long as hiring stays solid and AI spending holds up.