November 5: Tech Drop Sparks Haven Rally

A broad selloff in AI-linked equities drove a front-end-led Treasury rally and haven FX outperformance, while oil rebounded. US Treasuries bull-steepened (2y: -12bp; 10y: -5bp; 30y: -2bp) as the equity selloff stoked haven demand, sending yields to their lowest levels since early September. Initial jobless claims fell to 189k (C: 196k) and 3Q productivity rose 3.6% q/q annualized (C: 2.7%), with unit labor costs falling 0.7% (C: +0.4%). Market-implied odds of a hike at the December 9 FOMC meeting fell to roughly 70% from about 83% on Wednesday. US equities posted their largest one-day decline since April 2025 (S&P 500: -4.4%; NASDAQ: -5.5%), led by IT (-7.3%) as investors reassessed the outlook for the AI infrastructure buildout. The Philadelphia Semiconductor Index fell 12%, its worst day since March 2020, and the Nasdaq 100 shed a record USD 2.3tn in market value, while the VIX rose 69.7% to 28.2. USD was little changed (DXY: -0.0%) as haven demand offset lower yields, while JPY outp