Global Stocks and Bonds Plunge: 30-Year Treasury Yield Surges to 5.33%, AI Industry Supply Chain Suffers Major Setback

BlockBeats News, August 19th. The global financial markets experienced a severe volatility, with a "stock and bond massacre" in the European, American, Japanese, and South Korean markets. The surge in long-term U.S. Treasury yields became the focus of the market.

In the Asian markets, the South Korean stock market plunged, triggering circuit breakers. The KOSPI index fell by 5.8%, SK Hynix dropped by nearly 10%, and Samsung Electronics fell by over 8%; the Nikkei 225 index fell by 3.16%. Over 5000 A-shares declined, with the semiconductor, computing power hardware, PCB, memory, and CPO AI industry chain sectors leading the losses.

In the U.S. stock market, the three major indices fell for the third consecutive trading day, with the Philadelphia Semiconductor Index plummeting by nearly 5% in a single day. Stocks of AI-related companies such as Micron Technology, Western Digital, SanDisk, Marvell, AMD, Intel, Coherent, and Credo experienced significant pullbacks.

Market analysis believes that the core trigger of this round of sell-off comes from the rapid rise in global long-term bond yields. The 30-year U.S. Treasury yield intraday rose to 5.33%, reaching a new high since 2007. Meanwhile, the long-term government bond yields of France, Germany, the UK, and Japan have all risen to multi-year highs, and the global long-term cost of capital is being repriced.

U.S. Treasury data shows that in June, foreign investors' holdings of U.S. debt decreased to $9.299 trillion, a reduction of approximately $72 billion from May. Among them, Japan's holdings decreased to $1.116 trillion, with a monthly divestment of $26.4 billion; the UK's holdings decreased to $939.9 billion.

As risk-free interest rates rise, the market is beginning to reevaluate the high-capital investment model of the AI industry. Investors are concerned that the continued expansion of data centers, GPU purchases, and infrastructure construction require significant financing, and higher funding costs may compress the future cash flow valuation of tech companies.

The current market is focused on three major variables: the trend of the 30-year U.S. Treasury yield, the Federal Reserve's assessment of the long-term interest rate path, and whether tech giants like NVIDIA and Broadcom can validate the expected returns on AI investments in their upcoming financial reports.

The U.S. Treasury will issue $16 billion of 20-year U.S. Treasury bonds at 1:00 AM Beijing time on Thursday, and the market will closely monitor the results of this issuance.