US 10-Year Treasury Yield Rises to 4.74%, Increasing Pressure on Risk Assets

The yield on the US 10-year Treasury has risen to 4.74%, increasing the valuation pressure on risk assets such as the New York stock market and cryptocurrencies. The S&P 500 fell by 1.43%, the Nasdaq Composite dropped by 2.05%, and the Dow Jones Industrial Average decreased by 0.85%, halting a three-week upward trend. The rise in long-term Treasury yields raises discount rates, putting pressure on technology stocks and AI infrastructure companies, as well as on non-interest-bearing assets like gold and cryptocurrencies. The US Treasury has expanded its buyback of long-term Treasuries, but market concerns about interest rates persist. The buyback size for Treasuries in the 10 to 30-year range has increased to at least $4 billion, with the application period running from September 9 to November 4. AI-related stocks are experiencing mixed valuations between earnings expectations and funding costs, with Broadcom discussing over $60 billion in debt financing related to AI chip contracts. In the retail sector, Home Depot reported a 5.7% increase in second-quarter sales, while Walmart's performance fell short of market expectations. The expanded long-term Treasury buyback by the US Treasury will begin on September 9.

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