Goldman Sachs credit strategist Amanda Lynam acknowledged in her latest report that the U.S. corporate bond market is undergoing a deep stress test due to the wave of AI capital expenditures. Its investment-grade and high-yield credit spreads are rapidly approaching the previously set peak for the downside scenario, and are expected to "modestly exceed" this range, with risks "clearly skewed towards further widening."

Tony Pasquariello, Goldman Sachs' head of hedge fund products, revealed that credit market veterans are repeatedly mentioning the word "collapse." Last week, Meta's earnings triggered a significant widening of AI credit spreads, with its Credit Default Swaps (CDS) reaching an all-time high, and Goldman Sachs' AI basket having fallen 23% since June.

This turmoil has spread to the sovereign bond market, with the spread between French 10-year government bonds and German government bonds widening to 178 basis points, the widest level since the 2011 European debt crisis. The French 10-year government bond yield has broken above 5% for the first time since 2002. The market is facing a triple overlay of AI financing pressure, year-end deleveraging sentiment, and European sovereign risk.