Bond Yields, AI Spending Threaten US Stocks
- France remains at the epicenter of Europe's fiscal concerns, setting the price to place its debt following a budget proposal that failed to quell investor anxiety over rising borrowing costs.
- Benchmark 10-year Treasury yields hit 5.34% on Thursday, their highest level in 24 years, as Treasury Secretary Scott Bessent acknowledged rising US Treasury yields align with global trends. Elevated fuel prices from the Iran war and surging AI spending continue pushing borrowing costs higher.
- Markets face a busy end of 2026, with investors eyeing third-quarter earnings and potential capex revisions from AI hyperscalers. Nelson Yu, head of equities at AllianceBernstein, noted "the number one thing to watch for is capex revisions from the hyperscalers."
- Chuck Carlson, chief executive officer at Horizon Investment Services, described the interest rate story as "the biggest headwind" for investors. Markets anticipate the Federal Reserve will pause hiking rates at its meeting later this month following weaker jobs data.
- Fourth quarters of midterm years have historically seen average gains of 6.4%, despite the looming November 3 midterm elections creating uncertainty. Sam Stovall, chief investment strategist at CFRA, noted stocks often "benefit from the lifting of election uncertainty" during this period.
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37 Articles
Reformatorisch Dagblad
US Treasury Secretary Scott Bessent has downplayed investors' concerns about rising government bond yields. "I would be worried if it were a rise happening only in the US," Bessent said in an interview with news site Axios that appeared this weekend. According to him, the latter is not the case.
Rising U.S. long-term interest rates have created global turmoil in the financial services industry. However, US Treasury Secretary Scott Bessent is playing down the implications.
Bond yields, AI spending threaten US stocks
Investors head into a part of the calendar that tends to be upbeat for US stocks, but that seasonal strength is under threat from a number of challenges, including a surge in bond yields and the market's apparent dependence on massive AI spending. As the fourth quarter kicks off, the stock market is already on pace for a solid year. The benchmark S&P 500 as of Friday had gained nearly 13% in 2026 and sat about 1% below its mid-August record high…
Watch the extended Scott Bessent interview on "The Axios Show"
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