Renewed concerns about AI spending and rising oil prices weighed on global equities. Technology and communication services sectors suffered sharp losses, while bonds provided a relative safe haven. European political and fiscal risks pressured the euro and widened sovereign yield spreads

• Tech earnings and higher AI spending plans sharpened concerns about future returns. IT and communication services fell 8% and 13%, respectively. Semiconductor weakness contributed to emerging markets’ 7.4% decline. US equities fell 1.0%.
• Middle East attacks on energy infrastructure and shipping pushed Brent towards $117 per barrel, renewing inflation concerns. Refining and transport bottlenecks continue to compound the shock. The energy sector gained 11% on the month.
• Treasuries provided a relative safe haven during the technology sell-off, with gains also supported by reduced expectations for further Fed tightening. Ten-year Treasury yields fell around 31 bps; US Treasuries returned 2.4%. The Fed and ECB both held rates, while keeping further rate hikes in play.
• The euro fell 1.7% against the dollar as French political unrest and budget concerns combined with Europe’s exposure to higher energy costs. France’s ten-year bong yield premium over Germany briefly moved above 175 bps before easing slightly later in the month. Euro area equities declined 1.6%.