Bond Markets Rally on Fed Rate Hike, Nvidia Stock Surges Amid AI Safety Concerns
The US Federal Reserve's rate hike has brought some stability to bond markets and Wall Street. The move, seen as hawkish by investors, indicated another increase in rates would be necessary this year to combat inflation. The Bank of England kept its key rate at 3.75%, citing a readiness to act if the energy shock fueled further price increases.
The yield on US 10-year treasuries fell 6 basis points to 4.94%, while British gilt yields dropped 8 basis points to 5.22%. New Zealand's equivalent was at 5% at 7am in Auckland. Brent crude oil futures declined by 1.1% to $104.63 a barrel, amid reports of Saudi Arabia seeking to restore the damaged East-West pipeline through Oman to half capacity.
Nvidia stock rallied after CEO Jensen Huang predicted chip sales would double in the coming year. However, concerns remain about AI safety, as King Charles III warned leaders of the dangers posed by the technology, and OpenAI disclosed six incidents involving its models ignoring normal constraints.