(Bloomberg) -- Treasuries rose as a Democratic sweep in the US midterms led to a selloff in shares of large US technology companies, stoking demand for havens.
The rally in the US government bond market on Thursday sent yields down across maturities by as much as nine basis points to the lowest levels since early September. The yield retreat began after the US stock market opened, with the Nasdaq 100 index falling 4.75% and the Philadelphia Semiconductor Index down 8.83%.
The Treasury market last month notched its biggest gain in more than two years as investors lost faith in the sustainability of capital spending on artificial-intelligence infrastructure and rotated from stocks to bonds.
“The fact that chip stocks are falling is an extension of the idea that there may be a pullback in the pace of capex spend,” said Anmol Sinha, fixed income investment director at The Capital Group. “That’s causing a reaction.”
Beyond haven demand for Treasuries, the prospect of a US economic slowdown resulting from fading enthusiasm for investment in the AI buildout has led to lower expectations for Federal Reserve interest-rate hikes in the coming months.