Investors buckle up amid AI trade turbulence

Data: FactSet; Chart: Axios/Matt PhillipsInvestors rushed for cover last week in the face of economic, political and market turmoil. Why it matters: The scramble for safety in both stock and bond markets suggests that investors see reducing risk as the simplest response to the crosscurrents — at least for now.The latest: Yields on U.S. 10-year Treasury notes — which earlier this month hit their highest level in over two decades at more than 5.30% — plunged to below 5% late last week before finishing at 5.00%. (Bond yields fall when bond prices rise, and vice versa.) Meanwhile, a slump in giant tech stocks — whose large market capitalizations give them enormous sway over cap-weighted indexes like the S&P 500 — resulted in stark outperformance for the less-AI-pilled S&P 500 equal-weighted index.On Thursday, the equal-weighted S&P 500 outperformed by nearly 2 percentage points — the biggest gap between the two versions of the blue chips since July 2024. State of play: The AI investment boom remains a source of anxiety for investors. For instance, Meta shares got trounced last week even after it reported much better-than-expected third-quarter sales and profit. The issue, it seemed, w…

≈