Nasdaq tumbles while Treasuries soar as Meta rekindles AI spending fears - Financial Times

Equity markets diverged sharply as the Nasdaq fell while Treasury bonds rallied, a pattern that typically signals investors rotating away from growth assets toward safety. The trigger, according to the Financial Times, was Meta's latest update, which revived concerns about the scale and durability of corporate spending on artificial intelligence. When a major technology company signals heavier AI-related outlays, investors weigh whether those costs will eventually translate into earnings or instead compress margins over the coming quarters.

The bond market's response is the more telling signal. Falling Treasury yields suggest investors are seeking the relative certainty of government debt and, potentially, trimming expectations for how long rates stay elevated. For technology stocks, whose valuations often hinge on discounted future profits, higher-for-longer spending without clear near-term returns can weigh on sentiment quickly.

What to watch: whether other large technology firms echo Meta's spending tone in upcoming disclosures, and whether the Treasury move extends beyond a single session. A sustained shift toward bonds alongside weaker tech performance would suggest a broader repricing of AI investment risk rather than a one-day reaction.