The 10-year U.S. Treasury yield once surged past 5.3%, and global bond markets underwent violent readjustments. Yet the market value of <$NVDA > was pushed higher against the tide to around $5.7 trillion, just one step away from the $6 trillion mark. The textbook logic that rising long-end yields suppress growth stocks has been completely rewritten in the current cross-market contest.
Behind the roughly 27% gain so far this year, downstream AI capital expenditures have not cooled as expected. Combined with the support of the company’s planned $150 billion share buyback, investors have still chosen to cluster around the most certain compute-power “command center” even amid headwinds from tighter macro liquidity. Elevated risk-free rates have not blocked the bulls’ pursuit of the premium for leading AI firms.
This kind of extreme valuation resilience has pushed cross-asset pricing to a delicate tipping point. If long-end U.S. Treasury yields continue to hover above 5%, how long can the AI narrative maintain its immunity to the macro discount rate—and whether that holds up—has become a key question that drives overall risk appetite.
Behind the roughly 27% gain so far this year, downstream AI capital expenditures have not cooled as expected. Combined with the support of the company’s planned $150 billion share buyback, investors have still chosen to cluster around the most certain compute-power “command center” even amid headwinds from tighter macro liquidity. Elevated risk-free rates have not blocked the bulls’ pursuit of the premium for leading AI firms.
This kind of extreme valuation resilience has pushed cross-asset pricing to a delicate tipping point. If long-end U.S. Treasury yields continue to hover above 5%, how long can the AI narrative maintain its immunity to the macro discount rate—and whether that holds up—has become a key question that drives overall risk appetite.