Just one week after hitting fresh all-time highs, U.S. stocks are showing signs of strain as investors begin to fret about returns on the trillions of dollars that have been put into AI. For U.S. consumers, it could mean a shakier economy moving forward. As of Thursday morning, the S&P 500 was off more than 1% from its week-ago record, while the tech-heavy Nasdaq had fallen about 4% below its peak last week. Driving the declines: Quarterly revenue growth at Anthropic has slowed, the Financial Times reported Wednesday.

The AI giant is expected to be worth more than $1 trillion when it goes public, and at nearly $17 billion, its revenue is still massive and the company said it is profitable. There are also rising concerns about whether China-based memory technology companies could undermine, or even overtake, their Western rivals. And even though the AI data center buildout has created a global shortage of processing chips, there are fears that Chinese mass production of memory chips could flood the market with an oversupply.

Meanwhile, investors have begun selling off the bonds backing some data centers, primarily over fears that AI revenues won’t be sufficient to cover the massive sums that have been borrowed to finance the building of the centers. On Thursday, economist Ed Yardeni, a widely respected market commentator, lowered his year-end target for the S&P 500 target to 7,900, down from 8,400, over what he said was rising investor caution about the artificial intelligence trade and lingering doubts about inflation and higher interest rates.

The S&P 500 currently sits at about 7,600. Most Americans don’t directly own tech stocks, let alone work in AI, which a growing number of studies show may have begun to limit job opportunities. Still, the AI buildout has been a massive part of what’s bolstering the economy, at least on paper. Nearly half of all U.S. economy growth this year is attributable to tech-related spending.

Those investments have also lifted the stock market even as a growing swath of other companies have experienced sharp declines in their share prices. The tech-driven gains have in turn created a wealth effect that has helped propel steady U.S. consumer spending and, by extension, the job market. The result has been sturdy economic growth, even as lower-income and even middle-income households have continued to struggle under stubborn inflation and declining earnings. “While higher interest rates, higher oil prices and persistent inflation create risks to the economy, strong positive forces such as the investment in AI infrastructure, high employment levels and consistent wage growth continue to outweigh the risks,” Wells Fargo CEO Charlie Scharf said earlier this week.

But other economists say consumers are already contending with a host of stressors that stand to weaken their position. The Bureau of Labor Statistics reported Thursday that inflation among businesses reached its highest rate since December 2022 — price growth that could eventually trickle down to consumers. If tech spending — and stocks — show any sign of sustained declines, broader U.S. economic growth would likely be at risk. “Higher interest rates, elevated energy prices, slow job growth and the sell-off in equities (if it continues) are all downside risks to consumer spending,” analysts with Citi wrote in a note Thursday.