S&P 500 streak under pressure as AI trade slides again; yields rise
Markets took a risk-off turn as the S&P 500 streak faced a setback. After nine straight weekly gains, the index struggled to reach a 10th consecutive week—an outcome not seen since 1985—following a sharp June 5 sell-off. The S&P 500 fell 2.64% (its worst single-day drop since October), while the Nasdaq Composite dropped 4.18% in its weakest session since April 2025.
The core driver was the AI trade sliding lower. A strong US jobs report shifted expectations toward “rates stay higher for longer,” pushing US two-year Treasury yields up 12 bps to 4.16%. That move pressured growth and AI-related stocks, and the weakness spread globally. Korean chip supplier SK Hynix plunged 8.9%, and South Korea’s Kospi fell 5.3%, showing the shock was not US-only.
Crypto was not immune. Bitcoin miners with AI exposure, including Hut 8 and CleanSpark, saw double-digit equity declines as they tracked the broader sell-off. Bitcoin briefly decoupled and ticked higher even as equities fell, but the broader risk-off tone eventually weighed on sentiment.
For traders, the key takeaway is that the AI trade slump coincided with rising risk-free yields. As yields climb, the opportunity cost of holding non-yielding assets like BTC rises, which can tighten crypto allocation appetite at the institutional level. With the AI trade still impacting macro expectations through Treasury yields, near-term volatility risk remains elevated for both equities and crypto.
Bearish
This news is bearish for crypto because it links broader risk-off pressure to rising Treasury yields—an unfavorable setup for BTC, a non-yielding asset. The article highlights that the AI trade slide is tied to a “higher for longer” rate repricing after a strong jobs report, with two-year yields jumping to 4.16%. Historically, similar yield-driven selloffs in growth/AI-heavy equities often spill into crypto via tightening liquidity and increasing opportunity costs.
Short term: elevated volatility is likely as traders continue to reprice rates and as AI-related equity weakness drags sentiment (including listed crypto miners). The brief BTC decoupling suggests there can be short rallies, but the article’s point is that risk-off sentiment eventually reasserts.
Long term: if higher yields persist, institutional allocation frameworks may keep BTC demand under pressure, limiting upside until either rate expectations cool or crypto offers a stronger risk/reward relative to cash/UST yields.