Treasury Yields Hit One-Month Low as AI Stock Selloff Sparks Safety Bid
A wave of AI-driven equity selling pushed the 10-year Treasury yield to 4.90% and the 30-year to 5.26%, both one-month lows.
A fresh wave of selling in artificial intelligence stocks sent investors rushing into US government debt on Friday, driving the 10-year Treasury yield down to approximately 4.90% and the 30-year yield to around 5.26% — both the lowest levels in more than a month. Bond prices and yields move in opposite directions, meaning the declines reflect heavy buying of US Treasuries as a safe-haven asset.
The flight to safety was sparked by mounting anxiety over the true cost of the AI boom. Alphabet's results earlier in the week reignited fears about runaway AI capital spending, pulling broad equity markets lower. Disappointing earnings from Amazon, which fell more than 12%, and Intel, which crashed over 22%, compounded the damage after Thursday's close and gave bond buyers further reason to pile in.
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Analysts say this episode differs meaningfully from typical risk-off events. When energy prices drive market stress, the dollar usually strengthens and yields rise in tandem. This time, with concerns centered squarely on US technology spending, the dollar index slipped to around 101.8 — on track for a second consecutive monthly gain but softer on the day — while yields fell. A Singapore-based strategist noted that AI-linked stress uniquely produced lower yields and a subdued dollar simultaneously.
The bond rally carries a self-correcting dimension: lower yields reduce financing costs for the very AI firms whose borrowing ambitions triggered investor concern in the first place. Still, risks loom. Oil remains elevated, with Brent on course for a fourth straight monthly gain, and a vessel fire in the Strait of Hormuz near Oman added fresh geopolitical uncertainty. Any escalation in the Iran conflict could quickly revive inflation fears and reverse the yield move. The Bank of Japan's rate decision later Friday — with markets pricing roughly an 80% chance of a December hike — represents the next major test, while ANZ's Khoon Goh warned that current central bank pauses are likely temporary and more hikes could follow in 2027.
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