An AI bubble is no longer Wall Street’s biggest fear. This stock-market risk just took its place.

Bank of America's latest global fund manager survey shows that concerns about a "disorderly rise" in bond yields have overtaken fears of an AI bubble as the top risk cited by investors. The shift is notable because it points to where professional investors see the more immediate threat: not in equity valuations tied to artificial intelligence, but in the bond market, which underpins borrowing costs across the economy.

The relevance lies in how yields transmit through markets. When government bond yields climb sharply and unpredictably, they raise the discount rate applied to future corporate earnings, which can pressure stock valuations — particularly for long-duration growth names. A disorderly move, as opposed to a gradual one, can also tighten financial conditions quickly and unsettle credit markets.

What to watch: the pace and drivers of yield moves, upcoming inflation and central bank signals, and whether any rise reflects stronger growth or rising risk premia. Those distinctions matter for how broadly markets absorb higher rates.