U.S. Treasury yields fell as concerns about the sustainability of the AI outlook resurfaced and equities declined. The 10-year yield dropped 12.3 basis points to 5.023%, while the probability of a Fed rate hike next week fell to 10.5%.
Treasury yields dropped on Thursday as equities declined and concerns about the sustainability of the AI outlook boosted demand for government debt. The Nasdaq fell about 2%, while Meta shares lost roughly 6% after the company reported quarterly results and announced new non-voting shares to help fund its AI expansion.
The 10-year Treasury yield fell 12.3 basis points to 5.023%, on pace for its biggest daily drop in more than 14 months. The 30-year yield fell 10 basis points to 5.337%, and the 2-year yield dropped 10.7 basis points to 4.716%. Markets put the probability of a Fed rate increase of at least 25 basis points at 10.5%, down from 27.7% a week earlier. The Treasury was set to auction $26 billion in five-year inflation-protected securities on Thursday.
Weekly initial jobless claims fell by 6,000 to a seasonally adjusted 194,000, below economists’ estimate of 200,000. The five-year TIPS break-even rate was 2.384%, while the 10-year rate was 2.336%.
