On August 18, the swift ascent of U.S. bond yields has surfaced as a major risk factor for the AI-fueled stock rally across Asia, underscoring the heightened susceptibility of tech firms to escalating borrowing costs. Data reveals that over the past five years, whenever the 10-year U.S. Treasury yield surged by 20 basis points or more within a single week, the MSCI Asia Pacific Index declined in 17 out of those 20 instances, with an average drop of 1.7%. As worries about the U.S. fiscal outlook intensify and the global bond market downturn broadens, this relationship is once again garnering significant attention. Hebe Chen, an analyst at Vantage Global Prime, emphasized that erratic swings in global bond markets will promptly reverberate throughout Asia, especially since the rise of the AI boom has increasingly intertwined markets in Taiwan, China, and South Korea with the U.S. tech cycle and capital movements. The recent significant surge in Asian stock markets has predominantly centered on the tech and AI sectors, which are the most reactive to rising capital costs, discount rates, exchange rate volatility, and shifts in global economic fundamentals.