Bond Market Volatility Hits Stocks Amid AI Optimism

The turbulent bond market is causing volatility in stocks on Wall Street, despite optimism about the AI industry.

The S&P 500 rose 0.4% in afternoon trading after spending most of the morning lower, while the Dow Jones Industrial Average gained 38 points or 0.1%, and the Nasdaq composite increased by 0.4%.

In Europe, losses were sharp as bond yields jumped overnight. London's FTSE 100 sank 1.7%, with the yield on the 10-year U.K. government bond rising to 5.37% before falling back. The CAC 40 in Paris dropped 1.6% following similar swings for the 10-year French government bond's yield.

The rise in yields is attributed to concerns about high inflation and oil prices, as well as governments' continued spending above their income levels.