The death knell for Treasuries was premature

Treasuries are regaining their role as a risk-off hedge while AI financing pressures increase dispersion across credit markets.

• The 10-year Treasury yield fell below 5% in October, including a 19-basis-point decline on October 22 after Meta's results and spending outlook intensified concerns about AI investment returns and financing.
• Schroders' rolling 15-day correlation between the Nasdaq 100 and the Bloomberg US Treasury Index turned negative again as of October 26, 2026, although the team cautions that the short observation period should not be overinterpreted.
• Anthropic reported $16.3 billion of revenue in the first six months of 2026, versus about $1.2 billion a year earlier, followed by approximately $16.8 billion in the third quarter.
• Meta plans to raise up to $98 billion in equity, while SpaceX secured about $40 billion in private-market financing; greater use of equity and private capital could reduce future public corporate-bond supply while increasing equity issuance.
• Credit risk is becoming more selective: CCC-rated bonds yield about 16%, broad investment-grade spreads have widened roughly 20 basis points since May, and CoreWeave bonds yield around 15% with distressed credit-default swaps.

Takeaway: Schroders favors agency mortgages and other securitized assets, municipal bonds, selective emerging-market debt and high-quality carry, while retaining dry powder because valuations remain tight in parts of investment-grade credit and financing assumptions could still be challenged.