Investors have increased demand for U.S. Treasury bonds following notable drops in the market capitalizations of several large artificial‑intelligence and technology firms, including Intel, Alphabet, Meta and Amazon. The shift has driven 10‑year real yields down to a seasonal low of 2.58%.
Tech and AI stocks retreat
During the most recent trading week, the cited companies experienced significant declines, prompting analysts to question the sustainability of recent growth in the AI sector. The broader U.S. economy reported stronger‑than‑expected third‑quarter growth, but concerns remain about the source of that expansion.
Bond market response
According to reporting from the Financial Times, the bond market has benefited from the pullback in AI‑related equities, with investors seeking a perceived safer haven. Portfolio manager Bill Campbell of DoubleLine noted that market expectations for AI‑driven growth are being reassessed.
Analyst commentary
Jason Granet, chief investment officer at BNY, said that the rapid expansion of AI companies last year makes it harder for them to maintain those growth rates, though he cautioned that slower growth does not necessarily indicate broader economic weakness. BNY chief economist Vincent Reinhart added that the heavy reliance on technology spending is a global phenomenon and a source of concern for many economists.
Additional perspectives
Arthur Hayes, co‑founder of the former BitMEX exchange, warned that a potential correction in the AI sector could lead to a market drawdown and might require government intervention to support large AI firms.
