Potential Slowdown in AI Capex Could Affect Fed Rate Hike Prospects, Treasury Yields

Dow Jones15:02

0702 GMT - There will still be some questions with the Democratic gains in the governor races as to whether AI capex and data-center growth is impaired or simply shifts to states with friendlier governments, Aptus Capital Advisors' John Luke Tyner says in a note. "I'd bet it slows but maybe not as much as feared," the portfolio manager and head of fixed income says. Regarding the prospects of further Federal Reserve rate hikes, "if the main pressures on inflation were energy prices and AI spend, I think there's a good chance the September 25bps hike was the last one of the cycle," Tyner says. Gridlock government tends to slow GDP growth, which probably opens the door for more downside in yields across the yield curve, he says.

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