Davide Barbuscia

A rush of bond sales by major tech firms to fund artificial intelligence expansion is creating a high-stakes bet for the $9 trillion U.S. corporate bond market, prompting caution from prominent investors like DoubleLine over the sector's growing debt load.

Investors are growing uneasy that the rapid rise in public debt used to bankroll AI investments could strain the U.S. corporate bond market and eventually dampen the appeal of tech stocks, despite leverage across most major companies remaining low for now.

Mark Kiesel, managing director and chief investment officer for global credit at bond giant PIMCO, is retiring from the firm, PIMCO said on Thursday.

With the U.S. government shutdown threatening to freeze October’s inflation report, the Treasury is expected to deploy a workaround to compute the index underpinning the $2.1 trillion market for inflation-protected bonds for the first time since their 1997 launch, a move that may cause pricing quirks as traders adjust their calculations.

Spreads on U.S. government credit default swaps, market-based gauges of the risk of a sovereign default, have ticked higher amid market concerns over the U.S. government shutdown.

The risk that pressure from U.S. President Donald Trump could shift the Federal Reserve to an overly dovish stance is the main near-term concern for the U.S. dollar, said a senior executive at U.S. asset manager PGIM Fixed Income.

U.S. bond firm DoubleLine said on Wednesday it is using a variety of official and private data sources to assess the health of the U.S. economy, as it is worried about a decline in the quality of data published by the U.S. Bureau of Labor Statistics.

Market euphoria could carry U.S. stocks another 20% higher before giving way to a collapse on the scale of the 1929 crash that ushered in a global recession, according to tail-risk hedge fund Universa Investments.

Top U.S. asset manager Vanguard is bullish on corporate bonds despite high valuations, and while it expects tariffs will continue to be a risk for the U.S. economic and inflation outlook, those headwinds could be offset by further Federal Reserve interest rate cuts.

Some investors are less certain a rapid shift to lower borrowing costs will materialize.