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This is the level where the 10-year Treasury yield becomes a ‘clear problem' for stocks, Goldman study shows

·1 min

The bond market’s volatility has traders concerned about the impact on stocks. Goldman Sachs suggests that if the 10-year Treasury yield reaches 5%, it could spoil the 2024 stock rally, as the correlation between bond yields and stocks becomes negative. The 10-year yield jumped by 5 basis points on Tuesday, fueled by an unexpected rise in employee compensation costs. The market anticipates the Federal Reserve will delay rate cuts until later this year due to persistent inflation. Higher bond yields may negatively affect equity valuations, especially as the market considers potential interest rate cuts by central banks. Rising yields also make risk assets less appealing compared to Treasury bills and notes which offer solid yields and lower risk.