Global Bonds Rebound for Best Week Since February

Global bond markets are set for their best week since February, rebounding as AI-related stock volatility and reduced expectations of a Federal Reserve rate hike this month end a months-long decline. The 10-year US Treasury yield fell 0.17 percentage points this week to 5.08%, down 0.31 points from last week's peak of 5.39%, lifting bond prices. Investor concerns over AI sustainability triggered chip stock selloffs, while strong inflows into bond funds and comments from Fed Chair Walsh in Bangkok, signaling no policy change, supported the rally. European long-term yields also eased, with UK 10-year gilts dropping to 5.39% and Italian bonds to 4.53%. The Nasdaq 100 fell 3% this week, its worst since July, as traders reduced short positions, calling the shift a classic defensive rebound driven by AI cycle worries.