Another positioning shakeout or the beginning of the end?

Hot US inflation data over the past couple of days have been overshadowed by renewed questions around the sustainability of the AI boom. With both equities and Treasury yields dropping sharply for the first time since the US-Iran war began, the mood music has shifted abruptly. That combination is consistent with what we would expect to see if the AI boom were to start unwinding, although this episode is more likely to prove to be another storm in a teacup.