Market Volatility Rises Amid Inflation Fears and AI Sector Rotation

Global markets experienced significant volatility as trade escalations and a hotter-than-expected PPI print reintroduced policy uncertainty. The unexpected rise in inflation data has pressured interest rate expectations, complicating the outlook for central bank policy. Within the technology sector, a sharp divergence emerged between AI infrastructure leaders and software providers. While infrastructure companies saw outsized growth, software multiples compressed due to growing fears of technological disruption. Nvidia CEO Jensen Huang addressed these concerns, arguing that investors are currently misreading AI's long-term impact on software applications. The combination of macroeconomic pressures and sector-specific shifts continues to drive rotation across major indices like SPY and QQQ.