AI rally ends the longest credit spread widening streak globally in 20 months.

The recovery in AI trading is reviving risk appetite in credit markets, ending the longest widening streak in global investment-grade bond spreads in 20 months. Whether this recovery can be sustained depends on AI companies' earnings and Federal Reserve policy, with investors weighing strong economic growth and attractive yields against the surge in debt financing to build out AI technology. Hyperscale tech companies may increasingly turn to equity markets to raise capital for AI initiatives, a signal that is also positive for credit markets; Meta's $25 billion stock offering could reduce its need for debt financing.