AI stock sell-off triggers decline in US and European government bond yields

Panic selling in the stock market drives funds to buy government bonds for safety. The yield on the 10-year U.S. Treasury bond fell by 10 basis points to 5.089%. The yield on the 10-year German government bond fell by 8.5 basis points to 3.3819%. The yield on the 10-year French government bond fell by 11.5 basis points to 4.7619%. The yield on the 10-year Italian government bond fell by 10 basis points to 4.4657%.

Strategists at TD Securities stated that the sharp decline in the AI sector has lowered market expectations for economic growth, making bonds a hedging tool.