The 30‑year U.S. Treasury yield hovered near its highest level in nearly two decades, reaching 5.337%, the intraday peak since 2007. Japanese long‑dated yields also closed at their strongest since at least 2006. A key driver is the AI industry’s appetite for debt, which competes with traditional borrowers. Equities struggled, with the Nasdaq down 1.3% and the PHLX Semiconductor index falling 5%, some components dropping 7% or more.

The S&P 500 fell 0.7% and the Dow closed down 0.2%. Renewed tensions in the Middle East weighed on markets after an unknown projectile struck a cargo ship in the Strait of Hormuz. The attack followed the expiration of a 60‑day truce between the U.S. and Iran, amid little progress towarda permanent deal. Brent crude hovered around $91 a barrel.

Klarna shares plunged 23% on the day it cut its 2026 revenue guidance below Wall Street estimates, eclipsing its strong second‑quarter results. The Swedish fintech said softer consumer discretionary spending in Germany, its largest market, and currency translation drag contributed to the outlook. The swift unwind of Situational shows how quickly information can spread across Wall Street, highlighting the risks of leverage after Archegos Capital’s implosion.

Aschenbrenner built his firm on a reputation as an AI soothsayer. His stature stemmed from a 165‑page essay in 2024, “Situational Awareness: The Decade Ahead,” that foresaw AI’s development.