US Treasury and Municipal Bond Yields Plunge as AI Stocks Sell Off
Investors shifted capital from artificial intelligence stocks to safe-haven government and municipal bonds, triggering the largest Treasury yield decline since August 2025.
A significant selloff in artificial intelligence technology stocks triggered a flight to safety on Thursday, driving the largest daily decline in U.S. Treasury yields since August 2025. Investors moved capital away from AI-related investments, including data centers, as high and rising interest rates prompted a market reckoning.
U.S. Treasury ten-year yields fell 11 basis points to 5.08 percent, while two-year yields dropped 7 basis points to 4.73 percent. This trend extended to other major economies, with bond yields also declining in Germany, France, and the United Kingdom.
The rally extended to the municipal bond market, which saw its sharpest yield decline since April 2025. Benchmark 10-year municipal yields fell 11 basis points to 3.79 percent, and 30-year benchmark yields dropped 11 basis points to 5 percent.
