Nomura cross-asset strategist Charlie McElligott noted in his latest report that market drivers have shifted from the inflation narrative to a systemic re-evaluation of AI-driven growth prospects. This shift means that U.S. Treasury duration positions are once again functioning as a hedging tool for equity portfolios. Rich Privorotsky, head of Goldman Sachs' Delta One business, holds the same view, believing that AI weakness is repricing the capital expenditure cycle and increasingly evolving into a growth shock. Thursday's market confirmed this shift, with the 10-year U.S. Treasury yield plummeting over 15 basis points in a single day, briefly falling below the 5.00% mark to a one-month low; the Nasdaq Composite Index plunged 2.60%, and the Philadelphia Semiconductor Index saw a daily decline of 6.72%. Option hedging demand surged, and the market is pricing in expectations of Federal Reserve rate cuts. McElligott attributed this sell-off to a rethinking of the AI trajectory, including Anthropic's revenue data falling short of expectations, Gartner warning of impending failures for emerging cloud service providers, lukewarm IPOs across multiple AI ecosystems, and disappointing guidance from Lam Research.