The yield on the 10-year U.S. Treasury note, a benchmark for global bond yields, fell below 5% for the first time in about a month on October 22 (local time).

The drop was driven by a wave of tech stock sell-offs in the stock market amid concerns over the profitability of artificial intelligence (AI) investments, combined with geopolitical instability in the Middle East, which drove investment demand toward safe-haven U.S. Treasuries.

As of 3 p.m. that day, the yield on the 10-year U.S. Treasury note stood at 4.952%, down 19.3 basis points (1 bp = 0.01 percentage point) from the previous trading day.

This marks the lowest level since September 17, with the daily decline being the largest in 3 years and 7 months since March 10, 2023.

Earlier, the 10-year yield had risen to 5.3645% on October 7, hitting its highest level since April 2002.

Yields on other maturities also fell across the board.

The yield on the 30-year Treasury bond, which serves as a benchmark for U.S. mortgages and other loans, dropped 15.1 basis points to 5.286%.

The 2-year Treasury yield, which is sensitive to monetary policy, also fell 18.8 basis points to 4.635%.

The daily drops for the 30-year and 2-year yields were the largest since August 2, 2024, and August 1, 2025, respectively.

Because bond yields and bond prices move in opposite directions, a decline in Treasury yields signifies a rise in prices.

The surge in Treasury buying on this day is interpreted as the result of a growing risk-off sentiment in the market, fueled by increasing caution over expanded AI infrastructure investments and aggressive corporate bond issuance.

In addition, regional tensions have escalated following reports that the U.S. and Israel are considering resuming military operations against Iran after the November U.S. midterm elections, bringing Treasuries back into the spotlight as a safe investment destination.

In particular, while indicators pointing to inflationary pressure continue, the market considers the likelihood of the Federal Reserve raising benchmark interest rates at the Federal Open Market Committee (FOMC) meeting next week to be low.

According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market lowered the probability of an October rate hike to 7.2% by that afternoon.

This is a significant drop compared to a week ago (27.7%) or a month ago (55.4%).

Despite tightening concerns stemming from inflation, risk asset volatility and safe-haven demand appear to be acting as major variables in the Treasury market.

Thomas Urano, co-chief investment officer (CIO) at asset management firm Sage Advisory, said, "A tug-of-war has continued between energy and inflation concerns and the demand for safe-haven Treasuries, but starting from last week, 'safe-haven demand' is currently gaining the upper hand in the Treasury market."

(Photo: AP, Yonhap News)