The 10-year U.S. Treasury yield fell below 5% on Friday amid market volatility and a flight to safer assets driven by sell-offs in AI-related technology stocks. Investors grew concerned about technology companies' rising debt used to finance artificial intelligence infrastructure, prompting increased demand for government bonds and pushing the 10-year yield below 5% for the first time in a month.
On Friday, the 10-year Treasury yield rose slightly by 1 basis point to 4.966%, while the two-year yield increased to 4.658%. The 30-year yield remained stable at 5.292%. Despite this modest rise, Treasury prices benefited from investors seeking safety amid equity and credit market volatility.
Concerns over AI-related borrowing escalated during October, with infrastructure firm CoreWeave notably affected. Its shares dropped 36%, its 9.75% bond maturing in 2031 jumped to a 15.72% yield, and its five-year credit default swap spread widened to 1,138 basis points, indicating heightened credit risk.
Market focus now shifts to the Federal Reserve’s upcoming interest rate decision. Although no hike is expected this month, there is about a 72% chance of a quarter-point increase in December. Rising energy prices are also complicating inflation forecasts, with West Texas Intermediate crude reaching $101.10 a barrel and Brent crude hitting $114.71 amid fears of supply disruptions after attacks on Saudi Arabian oil facilities.
Investors await preliminary U.S. manufacturing and services data for further insights on economic growth and inflation. The combined pressures of AI-related financial risks, elevated oil prices, and monetary policy uncertainty continue to dampen market sentiment, fostering caution around technology stocks and the broader economy.
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CNBC Top News: https://www.cnbc.com/2026/10/23/bonds-yields-us-treasurys.html
