# BlackRock Shifts to Short-Term Treasuries, Downgrades U.S. Stocks

By Enna Lee

Canonical URL: https://www.tokenpost.com/news/investing/30693
Published: 2026-10-13T01:23:20.000Z
Updated: 2026-10-13T01:23:20.000Z
Section: Investing

> The firm moved short-term U.S. government debt to overweight and cut U.S. equities to neutral, citing potential volatility from artificial intelligence infrastructure spending.

BlackRock's investment institute shifted its U.S. asset allocation toward short-term Treasuries and cut its rating on U.S. equities to neutral, marking a notable change after nearly six years of underweighting U.S. government debt.

The firm raised short-term U.S. Treasuries to overweight and moved long-term Treasuries from underweight to neutral. It also lowered U.S. agency mortgage-backed securities to neutral and reduced its underweight position in Japanese government bonds.

BlackRock's investment institute has maintained an underweight stance on U.S. Treasuries since October 2020, when the 10-year Treasury yield was near 0.9%. The yield has since risen above 5.2%, making current income levels more attractive, the firm said.

Interest-rate swaps now reflect expectations for at least three 25-basis-point rate increases over the next 12 months. BlackRock said Treasury yields would need to rise another 75 basis points during that period to fully offset the income earned from the bonds.

The firm attributed the U.S. equity downgrade to potential volatility from artificial intelligence infrastructure spending. Higher capital costs and financing needs could make differences in corporate returns more significant as investors assess whether companies can earn more than their cost of capital.

“We are managing near-term risks, not changing our core beliefs,” BlackRock said, adding that it remains positive on AI-related companies and listed infrastructure.