U.S. Treasury Yield Falls to 4.97% as AI Stocks Slide

Key Facts

The yield on 10-year U.S. Treasury notes fell to 4.97% on Thursday, October 22, as investors sought safety in government debt during a decline in artificial intelligence stocks, according to the Associated Press. The yield stood at 5.13% late in Wednesday's session before bond buying pushed it down to Thursday's level. The agency linked demand for U.S. government bonds to investors' desire to hold safer assets as those stocks fell. Concerns surrounding the artificial intelligence sector included excessive stock valuations, with the agency saying worries persisted that "their prices have risen too far." Investing also reported that political and financial turmoil in European sovereign debt markets contributed to investors' shift toward safe-haven bonds.

In equities, the Nasdaq Composite fell 2.6% during the October 22 session, according to the Associated Press. The S&P 500 fell 1.2% in the same session, posting its worst daily performance since July. As technology-linked indexes declined, most U.S. stocks rose during trading, according to the agency, highlighting a divergence between those indexes and the direction of most shares. Thursday's decline in the Treasury yield followed its rise to 5.293% in the September 29 session, according to Reuters coverage published by Investing. That September level was the highest for the benchmark 10-year yield since June 2007.

The shift into bonds coincided with a decline in seasonally adjusted U.S. initial jobless claims to 194,000 in the week ended October 17, according to the Labor Department's statement published on October 22. Claims fell by 6,000 from the revised reading of 200,000 for the week ended October 10. The four-week moving average fell to 197,750 in the week ended October 17. The previous average stood at 198,750, a decline of 1,000, according to the seasonally adjusted figures in the statement. Meanwhile, the seasonally adjusted number of people receiving unemployment benefits rose to 1,728,000 in the week ended October 10. That represented an increase of 25,000 from the revised reading of 1,703,000 for the week ended October 3.

On monetary policy, the Federal Reserve had raised its target interest rate range by a quarter of a percentage point at its previous meeting in September. The increase brought the federal funds rate range to between 3.75% and 4%, according to the central bank's statement. The Fed described economic activity in the statement as "expanding at a strong pace," while affirming that inflation remained elevated. It said its action was intended to support a faster return of inflation to the committee's 2% target. Against that backdrop, the personal consumption expenditures price index rose 3.4% year-on-year in August, according to the U.S. Bureau of Economic Analysis. New York Fed President John Williams had said on September 29 that the central bank had time to assess the data before deciding when to raise interest rates again, according to Reuters.

The next monetary policy meeting is the Federal Open Market Committee meeting scheduled for October 27 and 28, 2026, according to the calendar published on the Federal Reserve's website. The meeting will be followed by the release of the September personal income and outlays report, according to the publication schedule announced by the Bureau of Economic Analysis. The bureau set October 29, 2026, for the release of the next report. It is scheduled for publication at 8:30 a.m. Eastern Daylight Time. The September report therefore comes after the committee's meeting, while the personal consumption expenditures price index reading announced in the previous report covers August.