According to Woofun AI, the sharp correction in US technology stocks is triggering a dramatic shift of market capital from risk assets into US Treasury bonds, a move that is reshaping the market's safe-haven logic. US Treasuries, which had been long neglected due to the artificial intelligence investment boom, are now reasserting their core value as a safe asset. As investor doubts about the outlook for tech stocks deepen, Bitcoin may face significant downward pressure, as its price movements are highly correlated with tech stocks, and the reversal in capital flows directly threatens the short-term stability of crypto assets. Last week's market data clearly established the signal of this trend reversal. A report published by Bloomberg on the 18th (local time) showed that the US 10-year Treasury yield fell by approximately 17 basis points — it should be noted that 1 basis point equals 0.01%. Over the same period, the Nasdaq 100 index plunged 5.5%. This marked the first time since the US tariff shock in April of last year that these two key indicators experienced such a large simultaneous decline within a single week. This rare synchronicity indicates that the decline in Treasury yields means rising bond prices, and whereas stocks and bonds had previously exhibited an unusual pattern of falling in tandem, the weakness in tech stocks has now begun to push investors toward buying Treasuries for shelter. This data combination not only reflects a sharp shift in market sentiment but also signals a fundamental change in capital allocation logic.
On the macroeconomic front, the historical causes of how the AI boom pushed interest rates higher, as well as specific corporate cases of wavering confidence, deserve in-depth analysis. Since the start of this year, US Treasuries have failed to adequately fulfill their traditional safe-asset function, primarily due to high inflation, strong economic conditions, massive government borrowing, and corporate bond issuance aimed at financing AI infrastructure investment. These factors collectively drove interest rates higher, pushing the US 10-year Treasury yield up continuously over the past seven months to reach its highest level in more than 20 years. However, as doubts about the prospects of the AI industry intensify, the situation is changing. Signs of slowing revenue growth at Ansys, as well as the decline in bond prices of AI cloud company CoreWeave (CRWV.US), are both undermining investor confidence. Previously, AI investment had been driving US economic growth and semiconductor demand while also pushing up prices and interest rates, but now this engine appears to be showing signs of deceleration.
Woofun AI's compiled data shows that expert opinions and positioning variables further reveal deep structural changes in the market. Julius Bear bond strategist Alfonso Borges analyzed that an AI-induced economic recession is more akin to a traditional demand shock and could potentially lower inflation. He expects that in such an environment, intermediate-term US Treasuries will once again become an effective portfolio risk-hedging tool. Another factor that could reinforce the strength of the bond market is investor positioning. Until recently, futures short positions betting on rising US Treasury yields had been unusually large, but as the tech stock rout pushed Treasury prices higher (yields lower), some trend-following investors began to close their positions, further fueling the market's upward momentum. Additionally, $1.7 trillion in corporate bond issuance is an important variable. This year, US investment-grade corporate bond issuance has reached approximately $1.7 trillion, up 29% from the same period last year. This is because large technology companies increased bond issuance to raise funds for building AI data centers. John Bricks, head of North America US rates strategy at Natices, explained that if bond prices of AI-related companies decline, investment demand for new bonds could also decrease. As a result, more capital could flow into long-term US Treasuries, thereby changing the market's liquidity distribution.
However, inflation data, Federal Reserve rate hike expectations, and geopolitical factors pose severe challenges to the sustainability of the Treasury rally. Last week, the US CPI (Consumer Price Index) came in higher than expected, leading the market to briefly price in a 50% probability that the Federal Reserve would raise rates in October. Subsequently, as the tech stock selloff intensified, rate hike expectations declined somewhat, but the market still expects one rate hike within the year and another in 2027. The surge in international oil prices caused by the Iran war has also brought additional pressure. On the 16th, due to rising oil prices, US stocks and Treasury bonds simultaneously experienced declines. Steven Barrow, head of G10 strategy at Standard Bank, pointed out that the recent Treasury rebound may only be temporary, as inflation risks and structural capital flows favoring equities over bonds still persist. However, Masahiko Ru, senior bond strategist at State Street (STT.US) Investment Management, believes that if AI-related risk aversion intensifies further, US Treasuries could once again become an effective defensive asset, but this depends on verification from subsequent data.
Bitcoin's short-term outlook depends on changes in capital flows and its correlation with tech stocks. As US Treasuries are once again viewed as a safe asset, people have also begun to focus on Bitcoin's trajectory. Against the backdrop of capital flowing from tech stocks into Treasuries for risk aversion, Bitcoin is also likely to face selling pressure. Especially considering that Bitcoin has recently been highly synchronized with tech stocks such as the Nasdaq, if AI-related stocks continue to correct, the possibility of further declines in Bitcoin cannot be ignored. However, if the decline in Treasury yields can bring about an economic slowdown and easing inflation, thereby boosting market expectations for Federal Reserve rate cuts, the situation could change. Ultimately, Bitcoin's direction will depend on the magnitude of the tech stock correction, the reasons behind the decline in Treasury yields, and the capital flows of spot ETFs. Investors should closely monitor reports on Google News and check the latest news on Telegram to stay on top of developments in the BTC market. For more heavyweight Hong Kong stock news, download the Zhitong Finance app. For more Hong Kong stock and overseas wealth management information, please visit www.zhitongcaijing.com (search for "Zhitong Finance"); to join the Zhitong Hong Kong stock investment group, please add Zhitong customer service WeChat (ztcjkf).
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