By BERNARD CONDON and STAN CHOE, AP Business Writers

NEW YORK (AP) — The upheaval in stocks has been grabbing all the headlines, but there is a bigger problem looming in another corner of the financial markets that rarely gets headlines: Investors are dumping U.S. government bonds.

Normally, investors rush into Treasurys at a whiff of economic chaos but now they are selling them as not even the lure of higher interest payments on the bonds is getting them to buy. The freak development has experts worried that big banks, funds and traders are losing faith in America as a good place to store their money.

“The fear is the U.S. is losing its standing as the safe haven,” said George Cipolloni, a fund manager at Penn Mutual Asset Management. “Our bond market is the biggest and most stable in the world, but when you add instability, bad things can happen.”

That could be bad news for consumers in need of a loan — and for President Donald Trump, who had hoped his tariff pause earlier this week would restore confidence in the markets.

What’s happening?

A week ago, the yield on the 10-year Treasury was 4.01%. On Friday, the yield shot as high as 4.58% before sliding back to around 4.50%. That’s a major swing for the bond market, which measures moves by the hundredths of a percentage point.

Among the possible knock-on effects is a big hit to ordinary Americans in the form of higher interest rates on mortgages and car financing and other loans.

“As yields move higher, you’ll see your borrowing rates move higher, too,” said Brian Rehling, head of fixed income strategy at Wells Fargo Investment Institute. “And every corporation uses these funding markets. If they get more expensive, they’re going to have to pass along those costs customers or cut costs by cutting jobs.”

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Treasury bonds are essentially IOUs from the U.S. government, and they’re how Washington pays its bills despite collecting less in revenue than it spends.

To be sure, no one can say exactly what mix of factors is behind the developing bond bust or how long it will last, but it’s rattling Wall Street nonetheless.

Bonds are supposed to move in the opposite direction as stocks, rising when stocks are falling. In this way, they act like shock absorbers to 401(k)s and other portfolios in stock market meltdowns, compensating somewhat for the losses.

“This is Econ 101,” said Jack McIntyre, portfolio manager for Brandywine Global, adding about the bond sell-off now, “It’s left people scratching their heads.”

The latest trigger for bond yields to go up was Friday’s worse-than-expected reading on sentiment among U.S. consumers, including expectations for much higher inflation ahead. But the unusual bond yield spike this week also reflects deeper worries as Trump’s tariffs threats and erratic policy moves have made America seem hostile and unstable — fears that are not likely to go away even after the tariff turmoil ends.

“When the issue is a broader loss of confidence in the United States, even a much fuller retreat on trade might not work” to bring yields down, wrote Sarah Bianchi and other analysts at investment bank Evercore ISI. “We’re not sure any of the tools remaining in Trump’s toolkit will be sufficient to fully staunch the bleeding.”

The influence of the bond market

Trump acknowledged that the bond market played a role in his decision Wednesday to put a 90-day pause on many tariffs, saying investors “were getting a little queasy.”

If indeed it was the bond market, and not stocks, that made him change course, it wouldn’t come as a surprise.

The bond market’s reaction to her tax and budget policy was behind the ouster of United Kingdom’s Liz Truss in 2022, whose 49 days made her Britain’s shortest-serving prime minister. James Carville, adviser to former U.S. President Bill Clinton, also famously said he’d like to be reincarnated as the bond market because of how much power it wields.

The instinctual rush into U.S. debt is so ingrained in investors it even happens when you’d least expect.

People poured money into U.S. Treasury bonds during 2009 Financial Crisis, for instance, even though U.S. was the source of the problem, specifically its housing market.

But to Wall Street pros it made sense: U.S. Treasurys are liquid, stable in price and you can buy and sell them with ease even during a panic, so of course businesses and traders would rush into them to wait out the storm.

Yields on U.S bonds quickly fell during that crisis, which had a benefit beyond cushioning personal financial portfolios. It also lowered borrowing costs, which helped businesses and consumers recover.

This time that natural corrective isn’t kicking in.

What’s causing the sell-off?

Aside from sudden jitters about the U.S., several other things could be triggering the bond sell-off.

Some experts speculate that China, a vast holder of U.S. government bonds, is dumping them in retaliation. But that seems unlikely since that would hurt the country, too. Selling Treasurys, or essentially exchanging U.S. dollars for Chinese yuan, would make China’s currency strengthen and its exports more expensive.

Another explanation is that a favored strategy of some hedge funds involving U.S. debt and lots of borrowing — called the basis trade — is going against them. That means their lenders are asking to get repaid and they need to raise cash.

“They are selling Treasurys and that is pushing up yields — that’s part of it,” said Mike Arone, chief investment strategist at State Street Global Advisors. “But the other part is that U.S. has become a less reliable global partner.”

Wells Fargo’s Rehling said he’s worried about a hit to confidence in the U.S., too, but that it’s way too early to be sure and that the sell-off may stop soon, anyway.

“If Treasuries are no longer the place to park your cash, where do you go?” he said. “Is there another bond out there that is more liquid? I don’t think so.”

By SARA CLINE and KATE BRUMBACK

JENA, La. (AP) — Columbia University graduate student Mahmoud Khalil can be deported as a national security risk, an immigration judge in Louisiana ruled Friday during a hearing over the legality of kicking the activist who participated in pro-Palestinian demonstrations out of the U.S.

Immigration Judge Jamee E. Comans said at the conclusion of a hearing in Jena that the government’s contention that Khalil’s presence in the United States posed “potentially serious foreign policy consequences” was enough to satisfy requirements for his deportation.

Comans said the government had “established by clear and convincing evidence that he is removable.”

Lawyers for Khalil are expected to appeal. And a federal judge in New Jersey has temporarily barred Khalil’s removal from the country.

Khalil, a legal U.S. resident, was detained by federal immigration agents on March 8 in the lobby of his university-owned apartment, the first arrest under President Donald Trump’s promised crackdown on students who joined campus protests against the war in Gaza.

Within a day, he was flown across the country and taken to an immigration detention center in Jena, thousands of miles from his attorneys and wife, a U.S. citizen who is due to give birth soon.

Khalil’s lawyers have challenged the legality of his detention, saying the Trump administration is trying to crack down on free speech protected by the U.S. Constitution.

U.S. Secretary of State Marco Rubio has cited a rarely used statute to justify Khalil’s deportation, which gives him power to deport those who pose “potentially serious adverse foreign policy consequences for the United States.”

At Friday’s hearing, Khalil attorney Marc Van Der Hout told the judge that the government’s submissions to the court prove the attempt to deport his client “has nothing to do with foreign policy.”

Earlier this week, Comans challenged the government to share proof that Khalil should be expelled from the country for his role in campus protests against Israel and the war in Gaza. She said if evidence does not support his removal, she would “terminate the case on Friday.”

On Friday, Justice Department attorneys said in papers filed in federal court in Newark, New Jersey, that Comans would not have the authority to immediately free Khalil.

They said an immigration judge could determine if Khalil is subject to deportation and then conduct a bail hearing afterward if it is found that he is not.

Khalil isn’t accused of breaking any laws during the protests at Columbia. The government, however, has said that noncitizens who participate in such demonstrations should be expelled from the country for expressing views that the administration considers to be antisemitic and “pro-Hamas,” referring to the Palestinian militant group that attacked Israel on Oct. 7, 2023.

Khalil, a 30-year-old international affairs graduate student, had served as a negotiator and spokesperson for student activists at Columbia University who took over a campus lawn last spring to protest Israel’s military campaign in Gaza.

The university brought police in to dismantle the encampment after a small group of protesters seized an administration building. Khalil is not accused of participating in the building occupation and wasn’t among the people arrested in connection with the demonstrations.

But images of his maskless face at protests, along with his willingness to share his name with reporters, have made him an object of scorn among those who saw the protesters and their demands as antisemitic. The White House accused Khalil of “siding with terrorists,” but has yet to cite any support for the claim.

Federal judges in New York and New Jersey have ordered the government not to deport Khalil while his case plays out in court.

The Trump administration has said it is taking at least $400 million in federal funding away from research programs at Columbia and its medical center to punish it for not doing enough to fight what it considers to be antisemitism on campus.

Some Jewish students and faculty complained about being harassed during the demonstrations or ostracized because of their faith or their support of Israel.

Immigration authorities have cracked down on other critics of Israel on college campuses, arresting a Georgetown University scholar who had spoken out on social media about the Israel-Gaza war, canceling the student visas of some protesters and deporting a Brown University professor who they said had attended the Lebanon funeral of a leader of Hezbollah, another militant group that has fought with Israel.

Brumback reported from Atlanta. Associated Press reporter Larry Neumeister in New York contributed.

LONDON (AP) — Ireland’s data privacy watchdog said Friday it’s investigating Elon Musk’s social media platform X over its use of personal data to train his artificial intelligence chatbot Grok.

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The Data Protection Commission said it has opened an inquiry into “the processing of personal data comprised in publicly-accessible posts” that European users posted on X.

“The purpose of this inquiry is to determine whether this personal data was lawfully processed in order to train the Grok LLMs” under the bloc’s data privacy law, the commission said in a statement posted online.

An LLM, or a large language model, is a vast pool of text including articles, blog posts, essays and other material scraped from online sources that is used to teach the algorithms underpinning generative AI systems.

Under the 27-nation EU’s stringent data privacy law, known as the General Data Protection Regulation, or GDPR, the Irish watchdog acts as the lead regulator for X because its European headquarters is based in Dublin.

The watchdog has the power to impose penalties of up to 20 million euros or 4% of a company’s total annual revenue for severe violations.

X did not respond to an email request for comment.

By PHILIP MARCELO

NEW YORK (AP) — The former CEO of Abercrombie & Fitch is suffering from dementia and isn’t competent to stand trial on sex trafficking charges, according to prosecutors and his lawyers.

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Michael Jeffries requires round-the-clock care because the 80-year-old has Alzheimer’s disease, Lewy body dementia and the “residual effects of a traumatic brain injury,” defense attorneys wrote in a letter filed Thursday in a New York federal court, citing recent evaluations by medical professionals.

Prosecutors and defense lawyers want a federal judge in Central Islip to place Jeffries in the custody of the federal Bureau of Prisons for up to four months so that he can be hospitalized and receive treatment that might allow his criminal case to proceed.

Jeffries has been free on a $10 million bond since pleading not guilty in October to federal sex trafficking and interstate prostitution charges.

Prosecutors say Jeffries, his romantic partner and a third man lured men to drug-fueled sex parties in New York City, the Hamptons and other locations by dangling the promise of modeling for the retailer’s ads.

Lawyers for Jeffries didn’t immediately respond to an email seeking comment Friday. The U.S. attorney’s office for the eastern district of New York declined to comment.

In their letter, Jeffries’ lawyers said at least four medical professionals concluded that their client’s cognitive issues are “progressive and incurable” and that he will not “regain his competency and cannot be restored to competency in the future.”

They said the doctors found that his cognitive issues “significantly impair” his ability to understand the charges against him, and to consult and participate with his counsel in his defense.

FILE – Michael Jeffries, former CEO of Abercrombie & Fitch, leaves following a hearing at the Paul G. Rogers Federal Building and U.S. Courthouse, in West Palm Beach, Fla., Oct. 22, 2024. (AP Photo/Rebecca Blackwell, File)

“The progressive nature of his neurocognitive disorder ensures continued decline over time, further diminishing his already limited functional capacity,” Dr. Alexander Bardey, a forensic psychiatrist, and Dr. Cheryl Paradis, a forensic psychologist, wrote following their December evaluations. “It is, therefore, our professional opinion, within a reasonable degree of psychological and psychiatric certainty, that Mr. Jeffries is not competent to proceed in the current case and cannot be restored to competency in the future.”

Jeffries left Abercrombie in 2014 after leading the company for more than two decades. He presided over the retailer’s evolution from a Manhattan hunting and outdoor goods store founded in 1892 to a fixture of teen mall culture during the early 2000s.

Jeffries’ partner, Matthew Smith, has also pleaded not guilty and remains out on bond, as does their co-defendant, James Jacobson.

Follow Philip Marcelo at twitter.com/philmarcelo