After an exuberant January, investors took a step back as concerns reemerged that inflation and tighter financial conditions could derail economic growth. The S&P 500 declined more than 2% for the month with all sectors other than technology losing ground. Real estate, energy, and utilities suffered the worst drawdowns. Emerging markets underperformed in response to tensions between the U.S. and China as well as the sustained strength of the U.S. dollar. Higher yields led to negative returns across all major bond markets. Sectors with less interest-rate sensitivity outperformed including short-term, taxable high yield and asset-backed securities. The yield curve inverted further, with Treasury bill yields reaching the highest level since the onset of the Global Financial Crisis.

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