US Treasury yields fall as AI spending concerns drive bond demand

US Treasury yields fell sharply Thursday, with the 10-year note dropping to 4.97% from 5.13%, as investors fled tumbling AI stocks and sought safety in government bonds, despite data showing persistent inflation. The 30-year yield slid 15 basis points to 5.287%, and the 2-year yield dropped 18.5 basis points to 4.638%, marking major moves. The drop came even as weekly jobless claims fell to 194,000, below forecasts, signaling a resilient labor market. Yields had recently hit multi-decade highs due to concerns over government debt and inflation. Analysts noted solid demand at a $26 billion TIPS auction, with market inflation expectations around 2.3% annually over the next decade.