A prominent research firm has issued a bearish warning on US equities, pointing to a confluence of rising Treasury yields and growing skepticism around the artificial intelligence investment cycle.
The firm’s decision to reduce its exposure signals a shift in sentiment among institutional investors who have long driven the market’s rally.
The caution comes as US Treasury yields have climbed, adding pressure to rate-sensitive sectors.
Higher borrowing costs erode the present value of future earnings, particularly for growth stocks that have benefited from the low-rate environment.
The move in yields reflects broader market concerns about inflation persistence and the Federal Reserve’s policy path.
Compounding the pressure is a growing sense that the AI boom may be facing a reality check.