Global stock markets, which had recently reached new highs, faced profit-taking pressure on Friday. Following record highs in major U.S. indices driven by AI leaders such as Nvidia, U.S. and Japanese government bond yields once again rose sharply in tandem, prompting investors to reassess the valuation levels of riskier assets. The yield on the 30-year U.S. Treasury exceeded 5.1%, while Japan's 10-year government bond yield also climbed to a multi-year high. Surging yields typically pose the greatest threat to high-valuation growth stocks, as much of their cash flow is projected far into the future; a rise in discount rates can significantly reduce their present value. Concurrently, ongoing concerns over shipping disruptions in the Strait of Hormuz have kept oil prices above $100 per barrel, further heightening market anxieties about the risk of stagflation.
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