Risks rise over AI reliance

Before the Federal Reserve’s interest rate cut last week, Treasury yields rose following Chair Jerome Powell’s Jackson Hole speech. The bond market remains cautious, with fiscal stimulus, heavy issuance, and tariffs threatening inflation, meaning any wrong move by the Fed could be costly. As US equity markets approach near-record levels and valuations become stretched, concerns are growing over the heavy reliance on a small number of companies spending big on artificial intelligence (AI). Large investment is likely to continue from these companies, with markets expecting them to benefit significantly....