WS #16355

The market is undergoing a violent repricing of the AI infrastructure thesis, triggered by Meta's $25 billion tax liability and a broader realization that the capital expenditure cycle for AI data centers may be outpacing immediate revenue generation. This has sparked a sector-wide selloff in high-multiple tech and power infrastructure names, with GE Vernova, Vertiv, and Eaton suffering double-digit percentage drops as investors question the financing sustainability of the buildout. The narrative has shifted from 'AI is unstoppable' to 'AI economics are broken,' creating a defensive rotation into utilities and consumer staples. Simultaneously, geopolitical tensions are escalating rapidly in the Middle East, with the US deploying a third carrier to the region and Russia signaling a hardline stance on Ukraine. This dual pressure is driving oil prices higher, with Brent closing up 4% and 2027 futures jumping 20%, while the Nasdaq 100 suffered a 3% intraday collapse. The combination of a tech-led equity selloff and an energy-led inflation shock is creating a 'stagflationary' environment that is forcing a flight to safety in Treasuries and gold, as evidenced by China's continued accumulation of bullion.