[Bank of America: Bond Market Volatility Testing AI Bull Market, Deleveraging Risks Intensify] BlockBeats News, September 29, Bank of America strategist Michael Hartnett issued a new warning that the sharp volatility in the U.S. bond market is becoming a new source of pressure for risk assets. The MOVE Index, which he monitors, jumped about 35% in two trading days, reflecting greater volatility in the financing system centered around U.S. Treasury collateral. Hartnett cautioned that if the global financial stocks ETF (IXG) falls below $125 and the MOVE Index remains above 125, the market could enter a broader "risk-averse deleveraging" phase. This would subject AI trades to a more stringent interest rate test. In recent times, the earnings resilience of tech giants and AI capital expenditures have supported U.S. stocks, but persistently rising long-term interest rates will simultaneously increase financing costs and valuation discount rates. Last week, the 10-year U.S. Treasury yield briefly rose above 5.2%, the highest level since 2007. A previous Bank of America survey of fund managers also showed that "disorderly bond yield increases" have surpassed the AI bubble as the market's most concerning tail risk. Hartnett's core assessment is that rising yields alone do not necessarily end risk appetite; the truly dangerous combination is the simultaneous occurrence of high yields and weakening financial stocks. This would indicate that interest rates have shifted from being a signal of economic expansion to a source of tightening liquidity and credit conditions. Leveraged funds would be forced to reduce positions, and the resulting pressure could spread from bonds to tech stocks, bank stocks, and other high-valuation assets. For AI bulls, the focus going forward will be on whether bond volatility can subside, whether bank stocks can stabilize, and whether long-term yields show signs of peaking. Bank of America still believes that yields are the primary underlying threat to the current economic and stock market expansion. Once interest rate pressures ease, large-cap tech stocks could still regain favor with investors.