As the artificial intelligence sector's competition evolves from a focus on technological advancements to a race for capital, tech behemoths are increasingly turning to the investment-grade bond market. They are successfully drawing in funds by offering spreads that surpass those of U.S. Treasuries. At present, Wall Street is experiencing a notable capital reallocation, with numerous institutions choosing to 'offload U.S. Treasuries in favor of AI-linked bonds'. This fierce competition for financial resources has emerged as a pivotal factor propelling U.S. Treasury yields upward.

Despite the U.S. Treasury Department's efforts to alleviate the pressure on escalating long-term interest rates by ramping up its repurchases of long-term bonds, the impact has been relatively muted. Recently, long-term U.S. Treasuries encountered another wave of selling, causing the yield on 30-year bonds to climb back to pre-intervention levels. Analysts highlight that the current trajectory of long-term interest rates is no longer solely dictated by growth and inflation forecasts. Instead, it is shaped by a confluence of factors, including fiscal expansion, the burgeoning AI investment craze, and fluctuations in global oil prices. Should interest rates surpass critical thresholds, it could potentially spark a wider risk-averse sentiment across the market.