Treasury Haven Returns Amid AI-Driven Tech Selloff

Tech stocks tied to artificial-intelligence projects have recently slumped, prompting investors to retreat to U.S. government bonds. Concerns over the sustainability of AI-related spending, weaker consumer confidence, sluggish payroll growth and a sharp decline in pending home sales have amplified doubts about a near-term “AI boom.” At the same time, broader market stress—including turmoil in Europe and heightened Middle-East tensions—has reinforced the appeal of Treasuries as a defensive asset.

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Craig Veysey of Guinness Global Investors described the move as a “turning point,” arguing that if recession fears outweigh AI optimism, bonds could post strong performance.

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• Short-term Treasury yields fell up to 20 basis points, signaling renewed demand for safety.

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• Benchmark 10-year yields rose 2 basis points to 4.97 %.

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• The Nasdaq 100 and the Philadelphia Semiconductor Index recorded their steepest weekly declines since June.

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• Brent crude traded around $114 a barrel following attacks in Saudi Arabia, yet the bond rally persisted.

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The renewed haven function of Treasuries suggests that investors are prioritizing capital preservation over growth bets tied to AI. If recession concerns dominate market sentiment, the shift could keep yields lower for longer, influencing borrowing costs for corporations and the federal government. Conversely, analysts remain divided on whether AI-driven productivity will eventually lower inflation and permit rate cuts, or whether sustained investment will keep yields elevated.

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• “If investors start to get worried we’re going to fall into a recession, not an AI boom, then we might actually see bonds start to perform quite significantly,” — Craig Veysey, of Guinness Global Investors

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• “The market has taken a one-two punch from higher oil and a broad AI liquidation,” — Chris Weston, head of research at Pepperstone Group Ltd

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