The 30-year U.S. Treasury yield hit its highest level in 19 years, topping 5.33% on Tuesday, as bond yields rose globally. Rising yields are putting financial pressure on AI investments by increasing discount rates for future earnings and raising borrowing costs for companies funding data center projects. Technology stocks suffered across the board: the Nasdaq fell 1.3%, the VanEck Semiconductor ETF (SMH) dropped 4.1%, and the Roundhill Generative AI & Technology ETF (CHAT) tumbled 5.7%. Peripheral players like CoreWeave or Oracle, which rely more heavily on debt, could face more existential pressure than megacap tech names like Microsoft or Amazon, according to analysts. Historical analysis from Ned Davis Research confirms that all five major market bubbles in the last century saw rising yields and policy rates into their peaks, but a single 25-basis-point increase would likely not derail AI financing.
Source: Read the original article
