Rising oil prices and surging global bond yields are testing investors’ appetite for risk, but equities continue to show remarkable resilience.
The question is whether the equity rally can withstand higher borrowing costs and what history can tell us. In 2007, US 10-year yields climbed above 5% while the S&P 500 continued to advance — until deteriorating credit conditions and the subprime crisis changed the picture. Today, strong earnings, fiscal spending and massive AI investment are helping markets absorb higher rates.
But risks are building. Oracle’s latest data-centre developments highlight growing concerns around power availability, financing and who ultimately carries the cost of the AI boom. With AI increasingly embedded in equity indices, bond issuance and investment flows, it has become a cornerstone of market strength. If earnings hold and yields rise orderly, the rally could continue. If something cracks in AI, the story could change quickly.
Watch the full episode to find out more!
Intro0:47 Oil, yields drive markets
3:26 Q3 in a nutshell
4:48 What happened when US yields cross 5% in the past
8:43 Q4 outlook
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