10-year US Treasury yield surpasses 5.2% again as rising oil prices heighten financing cost pressures

Summary

The 10-year US Treasury yield rose to 5.2361% on Sep 28 and 5.26% on Sep 29, a 19-year high, as Brent crude jumped after Trump rejected Iran’s Hormuz proposal, stoking inflation concerns and Treasury selling; higher rates and oil raise financing costs for AI infrastructure borrowers and pressure valuationsZhitong.

Impact Analysis

So the market is no longer treating oil as a blip; it is repricing the Fed path and the discount rate for growth. Brent near $100-106 and the 10-year at 5.26% mean AI capex now has to clear a much harsher hurdle: debt is more expensive, and future earnings get discounted harderZhitong. The tell is the split between companies that can still raise capital and those that cannot—CoreWeave rose even while leveraged, Oracle fell, and CCC, private-credit, and software names face refinancing pressure. For the portfolio, I would fade debt-financed AI infrastructure and credit-sensitive names, while favoring cash-rich large companies. The real risk is not that AI demand stops, but that the market starts asking who can actually fund it and who can leave shareholders with cash returns when the cost of money stays elevated.