AM Markets Need to Know: China tightens AI safeguards, bond yields rise, and more
Stock index futures were lower on Tuesday while Treasury yields rose as traders looked forward to the Federal Reserve's interest rate decision later in the week.Here are the five news items investors should watch:China steps up AI safeguards: Beijing is taking increasing measures to guard against increasingly capable AI systems escaping human control, seeking to manage risks without curbing the technology's rapid . The move comes as Anthropic CEO Dario Amodei has urged AI companies to slow model development, and the company has disclosed cases involving AI models being used in cyber weapons and other high-risk activities.10-year Treasury yield hits 2007 high: The U.S. 10-year Treasury yield climbed to 5.03% Tuesday, surpassing its 2023 peak and reaching its highest level since 2007. Rising oil prices, heavier government debt, and renewed concerns are driving a broader global bond selloff, increasing pressure on equity valuations and borrowing costs.Rate hikes could trigger S&P 500 correction: Macro Risk Advisors expects potential Federal Reserve rate hikes to trigger an 8%-10% correction in the S&P 500 (), with another decline possible in December. CEO Dean Curnutt said higher rates could pressure corporate margins, weaken earnings expectations, and increase volatility if companies cannot pass higher costs to customers.Trump dismisses AI takeover concerns: President Donald Trump called concerns over AI a “hoax” during a surprise call with Nvidia CEO Jensen Huang at the All-In Summit. Trump also argued that data centers will generate wealth and said the U.S. should maintain its AI lead over China, underscoring the administration's focus on accelerating development.Clarity Act odds fall as crypto rally stalls: Polymarket odds of the Clarity Act passing this year fell to 18% from above 30% during U.S. trading, weighing on crypto sentiment. Bitcoin retreated from nearly $79,600 to below $78,000 as Democratic negotiators prepared a counteroffer to Republicans ahead of a key procedural vote.Content provided by Seeking Alpha is intended for information purposes only, and that Seeking Alpha does not offer any personalist investment advice and is not a licensed securities dealer, broker, US investment adviser or investment bank.