Global equity markets have largely ignored a sharp selloff in bond markets, with the MSCI All-Country World Index near an all-time high. Yields on long-dated government debt have surged to near two-decade highs amid concerns over inflation, fiscal deficits, and an AI-fueled corporate borrowing boom. The turmoil prompted a US Treasury intervention, yet stocks rebounded on optimism over AI demand and strong earnings.

Investors are weighing whether surging yields threaten the ongoing stock rally.