Bond Yields Are Rising. Why That Could End the Stock Market’s Rally.

Stocks hit record highs last week—the S&P 500 is about 5% above pre-conflict levels—but rising Treasury yields threaten the rally. The 10-year yield is at ~4.444%, flirting with a key 4.5% resistance level, while the 30-year yields ~5.006%; breaches of those thresholds have historically triggered deeper bond selloffs and could prompt rotation out of expensive equities. At 21.04x forward earnings and with the Magnificent Seven comprising 36.5% of the index, equities look stretched relative to long-term averages. Strategists warn that higher Treasury coupons and lower bond prices could pull income-seeking capital away from stocks, potentially forcing a bearish repricing if 10s exceed 4.5% and 30s top 5%. For now, strong earnings momentum supports risk appetite, but the market remains vulnerable to further rate-driven volatility.