AI funding crunch hits tech stocks first
Yields on some CoreWeave bonds briefly topped 15%, and the stock fell another 12% on Friday, down more than 50% from its year-to-date high. The Philadelphia Semiconductor Index fell for eight straight sessions, losing 16% over the period. Brent crude climbed above $110, and the 10-year Treasury yield hit 5.097%.
The 5.097% Treasury yield is the real liquidity drain in this selloff. With the risk-free rate at this level, it directly weighs on the denominator of risk-asset valuations. In the short term, prices will likely track high-beta assets and retest the previous high-volume trading zone. There is still substantial order-book depth there; a break below it would be when the market enters a true liquidity vacuum. Correlations are becoming more pronounced, and leveraged longs are crowded. AI computing-power tokens are the most vulnerable: their prices are pegged to expectations for AI capital spending, and CoreWeave's financing costs have doubled, directly pressuring valuations. The upside on any rebound is limited—don't try to catch the falling knife halfway down.
What’s your cost basis on the AI computing-power tokens you’re holding? Would you dare to add on this pullback?
$BTC $ETH $TAO
Yields on some CoreWeave bonds briefly topped 15%, and the stock fell another 12% on Friday, down more than 50% from its year-to-date high. The Philadelphia Semiconductor Index fell for eight straight sessions, losing 16% over the period. Brent crude climbed above $110, and the 10-year Treasury yield hit 5.097%.
The 5.097% Treasury yield is the real liquidity drain in this selloff. With the risk-free rate at this level, it directly weighs on the denominator of risk-asset valuations. In the short term, prices will likely track high-beta assets and retest the previous high-volume trading zone. There is still substantial order-book depth there; a break below it would be when the market enters a true liquidity vacuum. Correlations are becoming more pronounced, and leveraged longs are crowded. AI computing-power tokens are the most vulnerable: their prices are pegged to expectations for AI capital spending, and CoreWeave's financing costs have doubled, directly pressuring valuations. The upside on any rebound is limited—don't try to catch the falling knife halfway down.
What’s your cost basis on the AI computing-power tokens you’re holding? Would you dare to add on this pullback?
$BTC $ETH $TAO