U.S. Economic Growth Gains Momentum: What Recent Data Means for Investors

The U.S. economy is showing signs of momentum after a rocky first quarter. With the latest GDP data pointing to a strong rebound and a shift in investor sentiment toward the technology sector, now is a key moment to understand how these developments might shape your portfolio and the broader markets.

The Latest GDP Figures and What They Reveal

The U.S. confirmed that real GDP grew at an annual rate of 3.8 percent in the second quarter of 2025, . This rebound was driven largely by a drop in imports and a boost in consumer spending, though it was partially offset by weaker performance in exports and business investment.

The Atlanta Fed also revised its Q3 growth forecast downward , citing soft data from the (PCE) report. While this suggests some moderation, it still points to a strong economy by historical standards. For investors, the message is clear: the U.S. is expanding, but not without challenges.

What’s Driving the Growth—and What’s Holding It Back?

Consumer spending remains the primary engine of growth. With households continuing to spend on goods and services despite higher interest rates, demand has stayed resilient. That said, business investment and trade activity have been drag factors, especially for export-driven industries.

Looking beyond the U.S. core, the Southern California Association of Governments predicts . While this isn't a dramatic rally, it reflects the broader trend of a slow but steady economic recovery in key metropolitan areas.

One of the most interesting underlying trends is the shift in capital toward the technology sector. PwC's 2025 Global Investor Survey shows that 61 percent of investors expect the tech sector to attract the most investment over the next three years.

Demand for AI infrastructure, cybersecurity, and cross-sector innovation is rising—and with it, expectations for companies that can deliver on these promises.

Investor Implications: Sectors to Watch in a Growth Backdrop

With the economy stabilizing, growth-oriented investors have reason for optimism. However, not all sectors are in the same boat. Technology is clearly the standout, but there are nuances. For example, while investors want to see more transparency around AI-related strategies and returns, only 37 percent feel companies are currently disclosing enough.

At the same time, infrastructure is gaining attention. report highlights how the Department of Energy is targeting grid expansion to meet the surging demand for AI data centers. For those invested in energy, construction, or utilities, these projects represent long-term growth opportunities.

The Road Ahead: Balancing Optimism and Caution

While the current data is encouraging, investors should remain cautious. The Federal Reserve has not signaled an imminent rate cut, and inflation remains a concern. Moreover, global economic headwinds—especially in Europe and emerging markets—could pose risks to export-heavy firms.

Still, the U.S. economy appears to be on solid footing. As long as consumer demand remains strong and technology continues to absorb capital, the market should stay in a favorable environment for growth-oriented strategies. The key for investors will be to align their portfolios with the sectors best positioned to benefit from these trends while avoiding overexposure to areas still facing headwinds.

In short, the U.S. is growing again—but the path forward will require both optimism and a clear-eyed view of the challenges that remain.