How bond yields are slowing AI-fueled stock rally

How bond yields are slowing AI-fueled stock rally

Bond yields in the U.S. have risen this year, slowing down a stock market that has risen for years on the back of the artificial intelligence (AI) buildout.

After consistently rising, with a few exceptions, from late March through mid-August, the S&P 500 is down nearly 90 points from closing time on Oct. 7.

The Nasdaq composite, meanwhile, is down more than 1,100 points over the last two weeks, hitting its lowest point in more than a month on Tuesday.

The S&P 500’s information technology sector, which includes AI-focused firms such as Microsoft and Nvidia, is also down by more than 500 points from two weeks ago.

“If those [tech] stocks don’t do well, it’s pretty hard for the stock market to do much of anything,” Steve Sosnick , chief strategist at Interactive Brokers, told The Hill.

Bond yields in the U.S. and globally have increased throughout the last seven months , as high oil prices amid the Iran war and mounting government deficits have compelled investors to flee the market.

The 10-year U.S. Treasury bond yield is down roughly 25 basis points from Oct. 7, when it reached a 24-year high of 5.365 percent during intraday trading.

But the note remains more than a full percentage point above where it stood at closing time on Feb. 27, the day before the U.S. and Israel launched strikes on Iran.

The 30-year Treasury bond yield has also declined over the last two weeks, falling from 5.733 percent during intraday trading on Oct. 8 to under 5.45 percent this week.

Welcome to The Hill’s Business & Economy newsletter , I’m Max Rego — covering the intersection of Wall Street and Pennsylvania Avenue.

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Key business and economic news with implications this week and beyond:

China is pushing back against the Department of Homeland Security’s (DHS) order to remove products from Chinese AI startup DeepSeek from government systems, warning of potential retaliation.

A former OpenAI employee accused of bugging the company’s offices was planning to leave the U.S. for Saudi Arabia when he was arrested earlier this month, according to federal prosecutors.

President Trump and Vice President Vance announced a $25 million whistleblower program that would pay out cash for people who tip off the federal government about fraudsters.

United Airlines CEO Scott Kirby backed national wealth and inheritance taxes in an interview published Sunday, arguing they would help level the playing field for Americans.

Branch out with more stories from the day:

How Democrats could make Trump’s Education Department overhaul much harder

Democrats are preparing to use all the tools at their disposal to halt the dismantling of the Education Department if they win the House or Senate in November.

Business and economic news we’ve flagged from other outlets:

United Airlines misses estimates, squeezed by soaring fuel costs ( Bloomberg )

Boeing wins FAA approval for 737 Max 10 after years of delays ( CNBC )

Food importer files new lawsuit to block Trump’s Canada tariffs ( Reuters )

The FBI investigated whether South Carolina’s late Sen. Lindsey Graham (R) and Rep. James Clyburn (D) were involved in a bribery scheme in connection to Hawaiian naval defense contractor Navatek acquiring federal contracts in their home state, according to a report published by ProPublica on … Read more

The Cook Political Report, a nonpartisan election handicapper, on Tuesday moved Minnesota’s Senate race from likely to lean Democrat, while also moving South Carolina’s Senate seat from likely Republican to lean Republican. Read more

Opinions related to business and economic issues submitted to The Hill:

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