Rising Bond Yields Offset AI Stock Rally

Global stock markets faced significant volatility on October 1, 2026, as a surge in government bond yields offset gains in the artificial intelligence sector. Micron Technology initially sparked a rally after reporting record margins of 87% and earnings that beat consensus expectations, driving gains for Samsung Electronics and SK Hynix. However, this enthusiasm was dampened as the U.S. 10-year Treasury yield reached its highest level since 2002, while 30-year U.K. government bond yields hit a 28-year high.

The bond selloff was fueled by stubborn inflation, a resilient U.S. economy, and rising oil prices, with Brent crude approaching $100 a barrel amid stalled diplomatic efforts in the Middle East and conflict with Iran. These conditions strengthened the U.S. dollar to a three-month high and pushed the euro to a 16-month low, contributing to losses of more than 1% across major European indexes including the Stoxx 600.

Despite the broader market pressure, some technology firms showed resilience. Accenture shares jumped over 18% following strong quarterly profits, and Google launched its Gemini AI model for government and cybersecurity partners. In the investment sector, Blackstone committed $1 billion to a new defense tech company specializing in weapon interceptors. Meanwhile, Federal Reserve official Neel Kashkari questioned whether current monetary policy is as tight as previously believed, citing the high volume of oversubscribed deals.