Former Morgan Stanley Strategist Warns Rising Treasury Yields Threaten AI Boom

Ruchir Sharma, Chairman of Rockefeller International and former chief strategist at Morgan Stanley, warned that the 10-year U.S. Treasury yield surpassing 5% marks a structural shift that could end the era of cheap capital. Sharma noted that the AI boom relies heavily on low-cost funding, and rising interest rates, combined with high government debt and oil price volatility, create significant risks. While major stock indices remain stable, Sharma highlighted that market breadth is historically weak, with many individual stocks underperforming, a phenomenon he suggests could precede a broader market downturn.