Global stocks weather third-quarter AI, bond and crude maelstrom

Despite an unprecedented surge in global borrowing costs, currency interventions, wars, oil prices exceeding $100 a barrel, and AI's potential to wipe out humanity, global stock indexes remain relatively stable. The most widely tracked equity indexes are just 2% off their all-time highs and have seen a 12% increase so far in the year.

However, government bonds, particularly the US Treasury market, have become a source of concern. The 10-year yield has soared past 5%, reaching its highest level since before the 2007 financial crisis. This trend is part of a new upward structural trend, which is causing significant anxiety among investors. Other countries, such as Japan, Germany, France, and Britain, have also experienced record high yields.

This has led to the biggest hit to investors' returns in years, as bond prices move inversely to yields. Despite these challenges, the world's largest economies, like tech stocks, appear to be surviving the bond market selloff relatively unscathed. Experts remain cautious, however, pointing to the ongoing conflicts in the Middle East and Ukraine, rising interest rates, and upcoming Brazilian and U.S. midterm elections as potential factors that could disrupt the market.