US 10-year Treasury yield stays below 5% as SEBI fortifies Indian markets against global AI jitters

US Treasury yields edged up on Friday with the benchmark 10-year yield hovering just under 5%, following severe market volatility sparked by growing doubts over artificial intelligence tech valuations.

The 10-year Treasury yield rose 3.7 basis points to finish at 4.992% on Friday. The rebound follows a dramatic Thursday session in which the yield plunged 19.3 basis points—its largest single-day fall since the collapse of SVB Financial Group in March 2023—as investors rushed to government debt as a safe harbour.

Key US Treasury yield movements

Despite Friday's modest uptick, the 10-year yield closed the week down about 11 basis points, marking its third consecutive weekly decline. Short-term yields also reflected shifting sentiment; the 2-year yield rose 4.5 basis points on Friday to 4.68%, yet marked its fourth straight weekly drop—its longest losing streak of the year.

Macroeconomic indicators in the US presented a mixed picture. S&P Global's flash US Composite PMI Output Index dropped to 57.6 in October from 58.4 in September, indicating moderation while still remaining firmly in expansion territory above 50. Meanwhile, expectations for an upcoming Federal Reserve interest rate hike fell sharply, with CME FedWatch data assigning just an 8.3% probability to a quarter-point increase next week, down from 70.9% a month earlier.

Indian market integrity remains firmly protected

While Wall Street wrestles with tech capex fears and treasury fluctuations, Indian capital markets stand on solid ground, underpinned by strong regulatory stewardship. The Securities and Exchange Board of India (SEBI) is actively advancing reforms to ensure domestic markets remain resilient against global head winds.

SEBI is reviewing existing framework rules on short selling and Securities Lending and Borrowing (SLB) to enhance transparency and curb speculative volatility. At the same time, the regulator is introducing an artificial intelligence sandbox alongside enhanced bond market-making facilities, establishing a safe, supervised environment to test cutting-edge financial technologies while bolstering liquidity in corporate debt markets.

These forward-looking measures demonstrate India's commitment to maintaining institutional integrity and systemic stability. By combining prudent oversight with modern financial infrastructure, Indian regulatory authorities continue to shield domestic assets from external market contagion, ensuring that the country's economic expansion remains stable and reliable.