The AI trade may be giving investors somewhere new to hide

The AI trade may be providing investors with a new place to hide as traditional hedges falter. For much of 2026, stock market declines have been accompanied by bond selloffs, upending the safety trade of rotating into Treasurys. Inflation, federal deficits, oil, and the financing needs of the AI buildout have pushed bond investors to demand higher yields, while strong profit projections for top AI companies have kept major indexes near record highs. A recent decline in chipmakers highlighted the sensitivity of the AI sector.

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