Why Did the Stock Market Endure Even with US Treasury Yield at 5%?

These big tech-related issues tend to concentrate within three days before and after expiration, interpreted as an offensive to induce artificial market volatility. In the past, there have been similar attempts to shock the market, so the current calls for AI slowdown are also viewed with suspicion as an extension of that trend.

The analysis that an AI company CEO, three months before an IPO, argued for an AI slowdown on humanitarian grounds lacks persuasiveness. If an AI model independently attempts hacking or goes beyond control, companies could face legal liability for illegal activities and astronomical lawsuits. Thus, the unanimous agreement of related companies on AI regulation is interpreted as a consensus to establish defensive systems to mitigate potential legal risks, rather than for ethical reasons.

They aim to create an autonomous regulatory framework and establish regulations that can exempt them from legal responsibility through specific procedures. This is interpreted as a strategic attempt, similar to an insurance disclaimer, to use it as a defense in future lawsuits.

The Anthropic CEO explicitly mentioned Chinese companies a dozen times during the AI regulation proposal, clearly indicating an intent to keep China in check. Chinese companies are growing by developing enterprise AI specialized in specific fields, primarily based on open source. These regulations can be seen as a calculated business strategy to push smaller Chinese companies with lower compliance costs out of the institutional framework and, as a result, gain a competitive advantage.

While calls for an AI slowdown have been mentioned before, questions are growing about the sudden reappearance of the issue. The possibility of China containment as a motive is raised, but the timing, coinciding with delicate market moments like option expiration dates, adds uncertainty to its background.

An excessive increase in big tech companies' volatility around option or futures option expiration dates continues to be observed. Like past cases such as Meta's data center, this volatility raises reasonable suspicion among market participants. The perspective is that certain market forces might be intentionally adjusting big tech stock volatility using expiration dates.

On futures option expiration dates, strange market trends appear. While the index itself shows limited volatility at 0.2% to 0.3%, the volatility of specific stocks like semiconductors greatly expands. This suggests that while the overall index movement is suppressed on expiration dates, significant changes in supply and demand for individual stocks occur.

The AI slowdown discourse is judged to be a temporary phenomenon lasting 2-3 days, a week at most. The most important variable to observe in the current market is the US 10-year Treasury yield surpassing 5%. Concerns about the Treasury's buyback program and dissonance in Fed policy are worrisome, potentially causing much more severe market impacts than short-term AI issues. Investors should react more sensitively to macroeconomic indicators than short-term issues.

While some Fed members indicate they will follow the majority opinion based on data, there are also criticisms of a lack of policy coordination between the Treasury and the Fed. Differences in opinion regarding the possibility of interest rate hikes are acting as a factor increasing market volatility, and the Fed's future decisions are drawing attention. Concerns are also growing about the ripple effects of interest rate hikes on the real economy.

As various variables such as changes in the macro environment and calls for an AI slowdown emerge, it is deemed rational to respond proactively rather than passively enduring. Securing liquidity to respond at any time while monitoring major market trends is crucial.

Despite the US 10-year Treasury yield surpassing 5% intraday, there was no sharp drop in Nasdaq futures or a significant overall decline in the index. This is a very unusual phenomenon compared to past cases. Typically, a surge in Treasury yields negatively affects tech stocks, but current market analysis suggests that AI momentum is acting as a strong defense mechanism against declines. Growth expectations for artificial intelligence-related companies are largely contributing to maintaining the market's downward rigidity.

In contrast, foreign selling tended to be limited to the impact of option expiration and AI issues. This suggests that individual investors are one of the main factors intensifying market downward pressure.

As individual investors' rebalancing volumes become predictable, institutional investors have shown a strong tendency to use this to gain short-term profits through pre-trading. With the acceleration of market information flow, these short-term trading strategies are deepening, creating an environment where individual investors find it difficult to respond to the market.