Archive · 4 Oct 2026
Rising Bond Yields Put AI-Driven Equity Boom to Test
US government bonds are paying higher interest than before.
Jefferies strategist Chris Wood says this could make stocks less attractive and put pressure on their prices.
So far, strong company profits have helped US stocks stay resilient.
Investment in artificial intelligence has been an important part of that profit growth.
But investors are asking how long companies will keep spending heavily on AI.
They also want to know whether that spending will earn enough money back.
Higher bond yields have also weighed on Indian stocks.
Wood says these risks are growing even as the AI investment boom continues.
Jefferies strategist Chris Wood warned that rising US Treasury yields are increasing risks for equities.
The 10-year Treasury yield reached 5.34% and the 30-year yield 5.69%, their highest levels since 2002.
Strong earnings, supported in part by AI-related investment, have helped US stocks withstand market pressures.
Wood said investors are questioning how long AI capital spending can continue and whether it will deliver sufficient returns.
Rising global bond yields have added pressure to Indian equities, which recorded an eighth consecutive weekly decline through Friday.
- Who
- Jefferies Global Equity Strategist Chris Wood
- What
- Wood warned that rising bond yields pose increasing risks to equities and said the sustainability of AI investment is a key question.
- When
- The warning followed a rise in US Treasury yields; the article does not specify a publication date.
- Where
- The United States and India, amid a global rise in bond yields.
- Why
- Higher yields could pressure equity valuations, while investors are assessing how long AI capital expenditure can continue and whether it will generate sufficient returns.
Reasons for Resilience
Risks to Equities
US stock performance
Reasons for Resilience
Strong earnings, helped by AI-related capital expenditure, have supported US equities despite higher yields and geopolitical tensions.
Risks to Equities
Rising bond yields could put pressure on valuations and make equities less attractive than fixed-income assets.
AI investment outlook
Reasons for Resilience
AI-related spending has contributed to earnings momentum and helped stocks withstand market pressures.
Risks to Equities
Investors are questioning how long the spending boom can continue and whether companies will generate sufficient returns.
- 10-year US Treasury yield
- 5.34%, its highest level since 2002
- 30-year US Treasury yield
- 5.69%, its highest level since 2002
- Indian equities
- Recorded an eighth consecutive weekly decline through Friday
- Support for US equities
- Strong corporate earnings and investment linked to artificial intelligence
- Key AI investment question
- How long the capital expenditure boom can continue and whether companies will earn sufficient returns
- Additional bond-market concern
- Government bonds across G7 economies remain in a structural bear market, according to Wood