Nasdaq futures rise as U.S. yields fall

After a 5.5% weekly loss, Nasdaq 100 futures rebound 1.3%. 10-year yield at 5.07%; Meta and Tesla report Wednesday.

Nasdaq futures rise as U.S. yields fall

Key Takeaways

  • Nasdaq 100 futures are up 1.3% at the start of the week, after the index lost 5.5% last week.
  • The 10-year U.S. Treasury yield stands at 5.07%, down from a peak of 5.36%.
  • Earnings from Meta, Tesla, IBM and Lam Research on Wednesday will show whether the rebound holds.

Anyone holding AI stocks last week felt it: the Nasdaq 100 shed 5.5% in a week. Calm returns at the open, with futures on the index up 1.3% and S&P 500 futures up 0.8%. This time, the bond market is the more interesting story.

When yields fall because stocks fall

Stefan Jäger describes an unusual link at Finanzmarktwelt. The 10-year Treasury yield hit 5.36% on October 7, the highest since 2002, and has since slipped to 5.07%. Thirty-year paper eased from 5.73% to 5.41%. According to Jäger, equities themselves are part of the trigger: investment-grade issuers have already sold roughly $1.7 trillion of bonds in 2026, 29% more than a year ago. When AI-linked names lose value, appetite for further issuance fades and competition for investor money eases. John Briggs of Natixis therefore expects relief for government bonds.

The equity sell-off hit Nvidia, Micron, SanDisk, CoreWeave and Nebius hardest. The reason, per Finanzmarktwelt: doubts are growing about whether the billions invested in AI infrastructure will pay off. On Friday, the Nasdaq and S&P 500 kept falling, and so did the Dow Jones, which had previously benefited from rotation into other sectors.

A safety net not everyone trusts

For some, this is a turning point. Afonso Borges (Julius Baer) and Masahiko Loo (State Street) argue that an AI-driven downturn would dampen inflation and make government bonds a hedge again. Steven Barrow of Standard Bank disagrees, calling it a fallacy; inflation risks and high oil prices remain. Brent rose more than 3% on Friday to about $109 and trades near $107.90 on Monday morning, down 1.8%.

Rate expectations fit the picture. CME FedWatch puts the chance of an October hike at just 13%, while almost 78% bet on a move in December. Germany's DAX benefited and closed Friday at 25,622 points (+0.95%), above its 100-day line near 25,420.

The calendar decides the rebound

The test comes in the next few days. Netflix and SpaceX report after the U.S. close on Tuesday, while Germany releases the ZEW survey and producer prices during the day. On Wednesday, Meta, Tesla, IBM, Lam Research, Texas Instruments and SAP report. Purchasing managers' indexes follow on Friday. Bloomberg analyst Mark Cranfield sees buying opportunities after the setback. If the AI heavyweights disappoint, the bond-market cushion could quickly turn into a pressure point again.