AI Sell-Off Sends Investors Fleeing to Treasurys as Bond Yields Fall

A sell-off in artificial intelligence-related stocks has prompted investors to seek shelter in US Treasury securities, driving bond yields sharply lower amid growing concerns about the cost and profitability of AI investment.

US Treasury yields fell as investors sought safer assets amid a global sell-off in artificial intelligence and semiconductor stocks.

The 10-year Treasury yield fell 14 basis points to 5.05 percent, while the 30-year yield declined 13 basis points to 5.40 percent, according to Yahoo Finance reporter Ines Ferré.

The 10-year Treasury yield is widely used as a benchmark for mortgages and other borrowing costs.

The bond rally followed a global decline in semiconductor shares, intensified by concerns about the financing required to build AI infrastructure and whether companies will generate sufficient returns from their investments.

Treasury yields had risen on Wednesday after a hotter-than-expected US inflation report, but reversed course as investors shifted their attention toward the risks facing technology companies and the broader economy.

The two-day reversal could offer an indication of how markets might react if spending on AI infrastructure slows or investors become less confident about future returns.

A sustained pullback in AI investment could weaken expectations for US economic growth and reduce Treasury yields across maturities, according to Thierry Wizman, a global foreign-exchange and interest-rate strategist at Macquarie Group.

The recent surge in yields had raised concerns about higher borrowing costs for households and businesses, particularly companies whose earnings prospects are less robust than those of major AI players.

At the same time, persistent inflation has complicated the Federal Reserve’s policy outlook.

Some market strategists have continued to consider the possibility of another interest-rate increase this year.

The latest market movement highlights the competing forces shaping bond prices: inflation and monetary policy on one side, and concerns about growth, corporate borrowing and AI investment on the other.