AI investment fears shake markets as investors seek safer assets

2026, October 16

United States / Europe / Asia

Global financial markets are reassessing the sustainability of the artificial-intelligence investment boom as borrowing costs and inflation remain elevated. US Treasury bonds are heading towards their strongest weekly performance since February, with investors moving towards safer assets amid concerns about technology valuations and the potential returns from expensive AI infrastructure projects. The yield on the 10-year US Treasury fell by approximately 0.14 percentage points during the week to around 5.11%, according to the Financial Times.

Meanwhile, Reuters reported that Brent crude was trading above $106 a barrel amid Middle East supply concerns. Higher energy costs could feed inflation and complicate central-bank decisions on interest rates. Investors are therefore weighing two competing risks: the possibility of an AI-driven market correction and the economic consequences of persistently expensive energy and borrowing.

Why it matters: Market volatility could affect pension funds, business investment, mortgages and government borrowing costs. A significant correction in AI-related assets could also spread beyond the technology sector.

Sources: Financial Times — US Treasuries head for strongest week since February · Reuters — Global markets and the AI investment outlook