US Treasury yields climbed further in early trading, with the 10-year and 30-year notes nearing 24-year highs again at 5.323% and 5.711% respectively. These increases reflect elevated inflation and ongoing fiscal concerns, as well as heightened demand for higher yields on long-term bonds.

Market strategists are divided on the direction of US Treasury yields, with Goldman Sachs and Deutsche Bank forecasting the 10-year yield will fall to 4.75% and 4.8%, respectively, by year-end. Barclays sees yields remaining elevated. "As long as the US economy is resilient, there is no particular catalyst in sight for why yields should fall below 5%," said Barclays strategist Anshul Pradhan.

Active investors may be better positioned to distinguish AI beneficiaries from companies facing margin erosion.

Hedge fund borrowing has roughly tripled since 2020, helping drive projected equity and fixed-income prime brokerage revenue to $47.9 billion this year as banks increasingly finance large trading firms. Regulators are watching growing leverage and concentrated exposures to a small group of major funds, amid concern that competition among lenders could weaken risk controls.

The Federal Reserve's decision to raise interest rates in September was unanimously backed by all 19 officials, according to minutes from the Federal Open Market Committee meeting. The move aimed to counteract rising inflation, with many officials noting increased economic momentum. However, recent comments by Fed Vice Chair Philip Jefferson and New York Fed President John Williams suggest the central bank may pause further hikes to assess the economy, leading investors to lower their expectations for another rate increase this month.