Rising bond yields are putting pressure on stocks, and, according to Goldman Sachs, once the 10-year Treasury yield surpasses 5%, it could spell trouble for equities. Historically, higher yields have correlated with weaker stock performance. The current yield of 4.67% suggests the market is in an "optimism phase," but as yields approach 5%, investors may shift towards bonds, leaving stocks vulnerable.
Bond yields are rising again, signaling that inflation isn't going away anytime soon. Investors are worried that the Federal Reserve's target of 2% inflation is unrealistic, leading to falling bond values.
Experts advise caution in the bond market, especially with long-term and risky investments. The front part of the curve, like 2-year Treasuries, is considered safer.
Geopolitical tensions are also playing a role, as rising commodity prices add to inflation concerns.
