WS #15082

The dominant macro signal is a violent repricing of US duration risk, with the 30-Year Treasury yield surging to 5.612%, the highest level since June 2002. This escalation in borrowing costs is triggering a liquidity crunch in the high-yield sector, where junk bonds are recording their worst monthly performance since 2022. The market is pricing in a persistent 'higher-for-longer' reality, forcing a sharp rotation away from rate-sensitive growth and speculative credit. Simultaneously, the AI infrastructure narrative is undergoing a massive capital expansion phase. Anthropic's disclosure of $84.5 billion in SpaceX compute agreements and OpenAI's surging B2B revenue (annualized run rate near $70B) confirm that demand for AI compute is outpacing supply, validating the bullish thesis for semiconductor and infrastructure plays despite the hostile rate environment. This creates a bifurcated market: pure-growth tech is under pressure from yields, but AI-capex leaders are finding support through undeniable revenue acceleration. Geopolitically, the Middle East remains in a state of escalation, though the immediate market impact is muted by progress in US-Iran talks which have pulled Brent crude below $96. However, the structural risk remains high, with the EU warning of energy supply risks and the UK BoE signaling that energy prices could reignite inflation, complicating the global central bank response to the US yield spike.