US long-dated yields ease as equities climb; AI results, Fed due this week

What happened

Longer-dated US Treasury yields fell on Monday as equities rose, while the 10-year yield stayed below 5%. Anthropic filed initial public offering paperwork, and earnings from Microsoft, Alphabet and Amazon are due this week.

Confirmed

Global impact / market context

Lower long-dated yields reduce borrowing costs for companies and households, which can support stock prices and capital spending. Investors are watching AI earnings for signs of future spending, which affects expectations for bond yields and how money is positioned across assets.

Analyst inference

The 10-year yield had its biggest one-day drop in nearly four years last Thursday during a stock selloff tied to worries about AI demand. Meta's plan to raise money for capital spending, which means spending on long-term assets, was read as evidence of rising costs.

Analyst inference

What to watch

1. Earnings reports from Microsoft, Alphabet and Amazon are due this week, and investors want to hear what AI-related companies say about future spending and the overall economic outlook. Confirmed
2. The Federal Reserve is expected to pause its interest rate hikes at its policy meeting, a proposal that could influence bond yields and borrowing costs if confirmed. Proposed
3. Watch Meta's plan to create a new class of shares to raise money for capital spending, since investors may treat more spending as a sign of pressure on profit per sale. Analyst inference

Evidence

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