The US long bond rose two points overnight as 10-year yields fell 19 basis points, their biggest daily drop since early 2023. Treasuries rallied as investors weighed AI infrastructure funding needs and sought safer assets.
Ten-year yields fell 19 basis points, while Fed funds futures rallied as much as 22 ticks, taking an entire rate hike off the table for next year; a December move is no longer fully priced in. The yen and Swiss franc also climbed as investors sought safe havens.
Meta's mention of needing “hundreds of billions of dollars” for capital spending spooked investors, and its shares fell almost 7%. CoreWeave shed another 10% as credit spreads widened across the sector. The article says investors are grappling with the scale of funding needed for computing infrastructure, with some estimates putting the cost at 1.6 times the cost of laying America's railways.
The article says Brent futures were above $113 a barrel and prices were over $100 through March, while crude for actual delivery was higher. With the Gulf conflict continuing into its eighth month, inflation is expected to be front and centre at next week's Fed meeting.
