Bond Rally Returns as Equity Selloff Revives Safe-Haven Demand
U.S. Treasury yields fell to three-week lows as technology-stock losses sent investors toward government debt across global markets.
Key takeaways
- The U.S. 10-year Treasury yield fell to 5.09% in Asian trading, Bloomberg HT reported.
- Technology-stock losses included an 8% drop in South Korea’s Kospi index.
- CoreWeave bond yields reached 15%, according to Ekonomim.
Government bonds rallied as losses in global stock markets pushed investors toward safer assets. The U.S. 10-year Treasury yield fell 10 basis points to 5.09% in Asian trading, its lowest in three weeks, Bloomberg HT reported.
The equity selloff has focused on technology companies tied to artificial intelligence. South Korea’s Kospi index fell 8%, while the Philadelphia semiconductor index dropped 4.3% on Wednesday, extending its losing streak to six sessions, according to Ekonomim.
Concerns about debt-funded AI infrastructure spending are also reaching credit markets. CoreWeave bond yields rose to 15%; LSEG data cited by Ekonomim put the company’s bonds at $22 billion and its loans at $26 billion.
BlackRock Investment Institute lowered its U.S. stock outlook to neutral and upgraded its view on U.S. Treasuries, favoring shorter-term bonds. Inflation and high public borrowing remain risks to the bond rally, while ITC Markets analyst Kit Lowe said he expected gains to continue, especially in medium- and longer-term bonds.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
