Strategists at BofA Global Research say the real danger to Wall Street's four-year bull run isn't rising bond yields — it's investor confidence in artificial intelligence. The bank argues borrowing costs matter less to stocks than whether that AI sentiment holds.
Strategists at BofA Global Research say the biggest risk facing the stock market isn't the recent spike in global bond yields but investors' confidence in artificial intelligence. The bank calls this dynamic the AI put.
Rising bond yields can create problems for companies looking to borrow money and for consumers looking to buy a home. But the trajectory of interest rates matters less to equity investors than the market's belief in AI, according to the report.
Major indexes showed a mixed picture. The Nasdaq Composite rose 0.24% to 26,861.06, while the S&P 500 slipped 0.25% to 7,651.54 and the Dow Jones Industrial Average fell 0.86% to 50,906.05. The 10-year Treasury yield stood at 5.291%.
The bull market will mark its fourth birthday in October, and BofA says its fate now depends entirely on that AI confidence holding up.
Source: MarketWatch (snippet-based)
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