Investors are seeing a familiar mix of headlines: interest rates are moving higher, oil prices have risen, and concerns about inflation and economic growth are high. At the same time, another powerful force is reshaping the economy: the rapid buildout of artificial intelligence.

These developments pull the economy in different directions. Higher oil prices can challenge consumers and businesses. Higher interest rates make borrowing more expensive. But AI is driving a major wave of investment in data centers, semiconductors, and power infrastructure. That spending has become large enough to matter for the broader economy.

AI Is Becoming a Ballast For The Economy

AI is no longer just a story about technology stocks. It is increasingly a capital-spending story that is big enough to move the entire economy. The companies leading the AI buildout are investing because they believe computing capacity and AI capabilities are strategically important to their futures. In the hyper-competitive technology industry, the cost of falling behind can be greater than the cost of investing. Because of this, their spending plans are not likely to change in response to modest increases in costs due to increases in oil prices or interest rates.

Higher Oil Prices Are A Speedbump, Not A Roadblock

Higher oil prices matter. They tend to get a lot of attention from the media because nearly all households are impacted by higher oil prices. They affect the cost of gasoline and the cost of heating or cooling your home. They also raise the cost of transporting goods, so they have indirect impacts on other prices as well.

But they are unlikely, by themselves, to meaningfully slow the AI investment cycle. Higher energy costs make most construction projects more expensive, but they do not change the long-term demand for computing power, and the strategic importance of the AI buildout. Higher oil prices will likely slow the economy at the margin, but they are unlikely to derail the AI's strongest sources of investment.

Higher Interest Rates May Have A Similar Effect

The same is true of interest rates. Higher borrowing costs can meaningfully affect housing, commercial real estate, and highly leveraged projects. But not all investments are equally sensitive to rates.

Second-quarter earnings reports suggest that many big technology companies expect high returns (above 25%) on their AI investments. For a marginal project with modest expected returns, an additional one percent of financing cost may matter. However, for a cash-rich technology company making strategically important and high-returning AI investments, a modest increase in financing costs is less likely to change their investment decision. That gives AI-related spending the potential to remain an important source of support for economic growth even as other, more interest rate-sensitive parts of the economy slow.

What This Means For Investors

We do not want to suggest that the economy is immune to higher oil prices or interest rates. Both remain legitimate risks, and AI investment will eventually need to produce attractive economic returns.

But familiar headwinds do not always produce familiar outcomes. Today, the U.S. economy has a powerful source of investment support that may help offset some of the pressure from higher energy prices and borrowing costs.

For investors, the message is simple: focus not only on the risks in the headlines, but also on the forces supporting the economy beneath them. Old headwinds are still in front of us, but the economy has some powerful new tailwinds.

Looking Beyond The Headwinds

Higher oil prices and interest rates are familiar challenges for the economy, and both deserve investors’ attention. But today, they are being met by a powerful new force: a significant AI investment cycle supported by some of the world’s largest and most financially strong companies.

With AI increasingly viewed as a strategic priority, modest increases in energy and borrowing costs are unlikely to materially change the investment plans of large technology companies. That spending could continue to provide meaningful support for economic growth, even as other areas of the economy feel more pressure.

For investors, it’s another reminder that the economic picture is rarely defined by a single headline. Understanding both the risks and the forces working beneath the surface can help put short-term developments into perspective.

Have questions about what today’s changing economic environment could mean for your portfolio? Contact us today. We’re here to help you understand the bigger picture and keep your financial plan focused on what matters most to you.

Michael Embrescia is a financial advisor located at EmVision Capital Advisors, 251 W. Garfield Rd. ​Suite 155 Aurora, OH 44202. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at (330) 954-3770 or at info@emvisioncapital.com.

Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Additional advisory services offered through EmVision Capital Advisors, LLC are separate and unrelated to Commonwealth. Fixed insurance products and services are separate from and not offered through Commonwealth Financial Network. Registration as an Investment Adviser does not imply any level of skill or training.

Important Information
This is for informational purposes only, is not a solicitation, and should not be considered investment, legal or tax advice. The information in this report has been drawn from sources believed to be reliable, but its accuracy is not guaranteed and is subject to change. Investors seeking more information should contact their financial advisor. Financial advisors may seek more information by contacting AssetMark at 800-664-5345.

Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio. No investment strategy, such as asset allocation, can guarantee a profit or protect against loss. Actual client results will vary based on investment selection, timing, market conditions, and tax situation. It is not possible to invest directly in an index. Indexes are unmanaged, do not incur management fees, costs, and expenses, and cannot be invested in directly. Index performance assumes the reinvestment of dividends.

Investments in equities, bonds, options, and other securities, whether held individually or through mutual funds and exchange-traded funds, can decline significantly in response to adverse market conditions, company-specific events, changes in exchange rates, and domestic, international, economic, and political developments.

Bloomberg® and the referenced Bloomberg Index are service marks of Bloomberg Finance L.P. and its affiliates, (collectively, “Bloomberg”) and are used under license. Bloomberg does not approve or endorse this material, nor guarantees the accuracy or completeness of any information herein. Bloomberg and AssetMark, Inc. are separate and unaffiliated companies.

AssetMark, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission.
©2026 AssetMark, Inc. All rights reserved.

9123130.1 | 09/2026 | EXP 09/30/2028