IMF cites AI slowdown, spiking yields as looming global market risks - Reuters

The International Monetary Fund has flagged two interconnected threats to global financial stability: a potential slowdown in the artificial intelligence boom and a sharp rise in bond yields, according to Reuters. Both matter because they strike at the same nerve — asset valuations that have been driven by expectations of continued growth and easy financing conditions.

An AI slowdown would matter well beyond technology shares. Years of capital spending on data centers, chips, and related infrastructure have been priced on the assumption that demand keeps compounding. If that narrative cools, the pullback could ripple through suppliers, credit markets, and the broader equity indexes that AI leaders now dominate.

Spiking yields present a different channel of pressure. Higher government bond yields raise the discount rate applied to future corporate earnings, which tends to weigh most on long-duration growth assets — precisely the AI-linked names at the center of the rally. They also tighten broader borrowing costs for households and firms.

What to watch: whether the IMF's warnings are echoed by other institutions, how AI capital spending guidance evolves, and whether yields rise in an orderly way or abruptly.