Bank of America sees bonds becoming the hedge against an AI selloff

After OpenAI's revenue scare sent stocks and Treasury yields lower together, BofA's derivatives team says an AI growth shock could hit both at once For most of the year, AI anxiety and rising bond yields traveled as a pair. Investors fretted about the AI trade, and yields climbed right alongside the worry. That relationship may be breaking down. Bank of America’s derivatives team now argues that if the AI bubble pops, stocks and yields could fall together. In that scenario, Treasuries go from casualty to cushion. The OpenAI revenue scare that flipped the script The trigger was a disappointing revenue figure from OpenAI in October 2026. The company’s annualized net revenue was estimated at $50 billion. Earlier projections had pointed to $70 billion. A $20 billion gap tends to get noticed, and markets noticed fast. The Nasdaq dropped more than 1% in a single session. The AI hardware and infrastructure names took the hardest hits. Nvidia slid 2.9%, AMD fell 3.9%, and Oracle dropped 5.5%. The more interesting move came in fixed income. US Treasury yields declined at the same time equities sold off. That is a departure from the 2026 pattern. Earlier in the year, AI-related fears had gen...