Why stocks haven't tanked despite higher bond yields: Chart of the Day

Live updates

1. 35d ago

   Wall Street Analysts See Bull Market Survival Despite Rising Yields

   Wall Street analysts believe rising bond yields will not derail the current bull market, though they acknowledge the path for stocks is now shakier. This optimism persists even as other market pressures emerge. For example, the Australian share market recently fell following losses on Wall Street and a surge in oil prices, which climbed above $US100 a barrel. While the broader equity market has shown resilience against the 10-year Treasury yield's approach to 5%, external shocks like energy costs are introducing fresh volatility.

   Why it matters

   Higher bond yields typically trigger investor anxiety because they increase borrowing costs and make stocks less attractive compared to fixed-income assets. The 10-year Treasury yield serves as a benchmark for global pricing. Market stability depends on whether economic growth can offset these higher rates.

   Still unconfirmed

   • Wall Street analysts claim rising bond yields will not derail the bull market.
   • Oil prices have surged above $US100 a barrel.
   • The Aussie share market fell following Wall Street losses and rising oil prices.

   What to watch next

   • Further movement of the 10-year Treasury yield beyond the 5% threshold.
   • Price fluctuations in oil and their impact on global equity indices.
   Sources used for this update (3)

   1. www.cnbc.com — Here's what 5% bond yields mean for the stock market — and which stocks to buy
   2. www.abc.net.au — Markets live: ASX falls following Wall Street losses and oil price surge
   3. seekingalpha.com — Weekly Commentary: Too Big To Fail Redux
   confidence 80%
2. 46d ago

   Stock Market Resists Pressure from Rising Treasury Yields

   Equities remain stable despite surging bond yields, though economists warn this resilience may be temporary. The 10-year Treasury yield is approaching 5%, a threshold that typically triggers investor anxiety. While rising yields have not yet broken the stock market or throttled the broader economy, the surge creates new risks for financial markets and specific sectors. Analysts are currently debating the long-term relationship between interest rates and stock prices as bond market volatility increases.

   Why it matters

   Higher bond yields typically make stocks less attractive by increasing borrowing costs and raising the discount rate for future earnings. The approach toward a 5% yield is particularly significant as it impacts commercial real estate financing. This tension creates a conflict between current market performance and traditional economic rules.

   What is confirmed

   • The 10-year Treasury yield is nearing 5%.
   • Economists state that high Treasury yields have not broken the stock market yet.

   Still unconfirmed

   • High yields will remain regardless of Kevin Warsh or the Iran War.

   What to watch next

   • Impact of yield increases on commercial real estate financing costs
   Sources used for this update (14)

   1. BBC — Are interest rates on the way up again?
   2. Bloomberg.com — Regardless of the Iran War and Kevin Warsh, High Yields Are Here to Stay
   3. The New York Times — How to Make Sense of Mayhem in the Bond Market
   4. businessinsider.com — High Treasury yields aren't breaking the stock market yet, economists say
   5. Musings on Markets — Interest Rates and Stock Prices: An Old Debate Flares up!
   6. The Economist — Surging bond yields presage pain—and not just for bond investors
   7. finance.yahoo.com — Why stocks haven't tanked despite higher bond yields: Chart of the Day
   8. Aswath Damodaran | Substack — Interest Rates and Stock Prices: An Old Debate Resurfaces!
   9. TradingView — The Market Broke The Rule for BITSTAMP:BTCUSD by BlueNyraFx
   10. Investopedia — Why Rising Bond Yields Aren’t Throttling The Economy, For Now
   11. Bloomberg.com — A 5% Treasury Yield Is Raising New Risks for Markets, Economy
   12. Yahoo Finance — 10-Year Treasury Nears 5%, Raising CRE Financing Risk
   confidence 85%