Rising US bond yields could put brakes on the equity market rally, analysts told S&P Global Market Intelligence.
“The faster yields move up, the worse it would be for equities,” said Andrew Brenner, head of international fixed income at National Alliance Securities, in an interview.
The 10-year Treasury yield hit a 12-month high of 1.38% soon before press time, taking the year-to-date gain to 46 basis points. Longer duration bond yields look to be tracking inflation expectations higher.
So far, stock markets have remained resilient. However, a continued rise could put some pressure on equities, as noted by Fawad Razaqzada, a market analyst with ThinkMarkets, said in a Feb. 17 note.
A potential rotation of money out of stocks and into bonds could put a haven bid under the anti-risk US dollar.