--- title: "An AI bubble is no longer Wall Street's biggest fear. This market risk just took its place." type: "News" locale: "en" url: "https://longbridge.com/en/news/299052792.md" description: "Global fund managers now view surging bond yields as the primary 'tail risk,' surpassing fears of an AI bubble, according to a Bank of America survey. With the 10-year Treasury yield exceeding 5%, driven by inflation and geopolitical tensions, 33% of managers cite disorderly yield rises as their biggest concern. Consequently, investors are rotating out of real estate and consumer staples into healthcare, industrials, and banks, while maintaining underweight positions in bonds." datetime: "2026-09-15T12:51:00.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/299052792.md) - [en](https://longbridge.com/en/news/299052792.md) - [zh-HK](https://longbridge.com/zh-HK/news/299052792.md) generator: "portal-rs" --- # An AI bubble is no longer Wall Street's biggest fear. This market risk just took its place. By Barbara Kollmeyer Rising bond yields are a big worry, say global fund managers U.S. Secretary of Treasury Scott Bessent speaks during the Republican National Midterm Convention at the American Airlines Center in Dallas, Texas on September 9, 2026. Surging bond yields are a major worry for global fund managers, says Bank of America. Global fund managers are being haunted by a new worry - the possibility that bond yields could shoot higher in a "disorderly" manner, stoking volatility that potentially spills over into stocks and the broader economy. That's according to Bank of America's September survey of 170 managers who collectively manage $470 billion in assets under management. Up from a net 27% in August, 33% of those managers now see uncontrolled rises in yields as the biggest "tail risk," facing them at present. A tail risk refers to a rare or extreme market event that has a low probability of happening. The survey shows that fears about surging borrowing costs have even supplanted worries about the AI trade possibly turning into a bubble. The yield on the 10-year Treasury note BX:TMUBMUSD10Y on Tuesday rose above 5.04% for the first time since the global financial crisis in 2007. Benchmark yields from Germany to Japan have been tracking the 10-year higher. Yields have been driven higher by worries over U.S. inflation, with oil prices climbing amid a deepening Iran war. That has combined with investor concern about rising government debt and deficits and extra bond supply from corporate AI spending. The Federal Reserve is not seen escaping the pressure, and largely expected to hike interest rates on Wednesday when its two-day meeting finalizes. The survey also showed that a net 46% of managers surveyed expect no impact on yields from the U.S. Treasury's buyback program that was announced earlier this month to help keep the world's biggest debt market running smoothly and stabilize long-end rates. Those managers who see a success were at a mere net 16%, with those expecting total failure at 29%. Long global semiconductor stocks was again flagged as the most crowded trade by a whopping net 53% of managers, with a short position on Treasurys coming in at second by 18% of managers. The Philadelphia semiconductor index SOX has surged 57% this year. The managers trimmed their overweight positions in stocks and commodities, but are keeping a large underweight in bonds, Bank of America reported. September saw a rotation into healthcare, industrials and banks - the most overweight since Nov. 2025 - and out of real estate investment trusts and consumer staples, which are now the most underweight since Jan. 2004. -Barbara Kollmeyer This content was created by MarketWatch, which is operated by Dow Jones & Co. 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