AI sell-off drives global equities lower, UBP says
SPY•Global equities fell 1.6% as an AI-led sell-off sent investors toward safe havens. Semiconductor stocks lost 13.6% over eight sessions, while the 10-year Treasury yield fell 17 basis points to 5.07% and Brent crude rose 5% to near $110 per barrel.
1. Markets retreat
Global equities fell 1.6% as investors moved toward safe havens. Global semiconductors lost 13.6% over eight consecutive sessions, their steepest such decline since 2008, amid concerns about AI valuations.
2. Credit and rates
CoreWeave’s credit default swap spreads exceeded 1,000 basis points, reaching distressed territory as AI-linked credit weakened. The 10-year Treasury yield fell 17 basis points to 5.07%, while Brent crude rose 5% to near $110 per barrel.
3. Inflation and rate outlook
US annual inflation accelerated to 3.7%, reviving rate-hike concerns. Markets assigned a 15% probability to an October increase.
