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AI earnings shield US stocks, but bond risks rise: Jefferies' Wood
Economic Times 1 hr ago·3 Oct 2026, 2:26 am
US equities have stayed resilient as strong earnings, driven largely by companies pouring money into artificial‑intelligence projects, have helped prop up the market despite broader concerns.
At the same time, rising Treasury yields and heightened geopolitical tensions are beginning to dampen sentiment. Analysts warn that the AI spending surge may not be sustainable indefinitely, and higher bond yields make equities comparatively less appealing. In addition, many G7 sovereign bonds appear to be entering a longer‑term downtrend.
Investors should watch the pace of AI‑related capital expenditure, upcoming corporate earnings, any shifts in bond yields, and geopolitical developments that could affect risk appetite. Potential changes in monetary policy could also reshape the balance between stocks and bonds.
Excerpt from Economic Times
US equities have largely remained strong, aided by robust earnings growth driven by the AI capital expenditure cycle. Rising bond yields and geopolitical tensions, however, are beginning to impact investor sentiment negatively. Analysts are concerned about the sustainability of the AI capex cycle and its expected…Read the original at Economic Times
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