Inflation -> Rotation -> Capitulation?
The AI Trade Has Met the Wrong Kind of Inflation
An oil shock is reviving global hike risk and forcing a leadership rotation before the growth cycle has fully broken.
The Nasdaq selloff looks like an equity story, but the more important signal is coming from rates and sector leadership. Oil has pushed global policy curves back toward hikes just as long-dated real yields test cycle highs. At the same time, defensive and financial sectors are gaining traction while technology’s relative momentum rolls over. This is not yet a recession signal. It is a test of whether the AI earnings story can survive a higher discount rate and whether the current rotation remains orderly.
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