Treasuries’ Link to AI Shows Sharp Shift as Haven Trade Returns
TL;DR
For much of this year, US Treasuries offered investors little of their traditional protection when technology stocks stumbled, Bloomberg reports. This week that role bounced back sharply, as money moved into government bonds while AI shares came under pressure. The shift marks a return of the classic haven trade. It comes after a sell-off in AI stocks dragged markets lower worldwide on Thursday.
Nauti's Take
Bonds acting as a hedge again is an opportunity for calmer markets and shows AI risk is being priced on its own. The risk: if investors treat AI stocks as a separate source of uncertainty, funding costs rise for capital-hungry providers.
Small teams should keep that in mind when signing long-term contracts with young AI companies.
Sources