When will the decline in U.S. Treasury bonds impact U.S. stocks? Very soon
The 10-year U.S. Treasury yield is gradually rising to a critical point. Goldman Sachs warns that if the yield surges by 60 basis points within the month, U.S. stocks will face adjustment pressure. It's not just the level of yields that affects the stock market, but also the speed of the increase
According to the latest analysis from Goldman Sachs, when the 10-year U.S. Treasury yield rises by about 60 basis points to 4.75-4.80% within a month, the stock market may face significant pressure.
On Friday, May 23, U.S. stock futures continued to decline in pre-market trading, extending the sharp drop following yesterday's U.S. Treasury auction. This trend corresponds with the rise in U.S. Treasury yields this morning.
Data shows that U.S. Treasury yields significantly climbed after the Senate passed Trump's "One Big Beautiful Bill." The 10-year U.S. Treasury yield is currently around 4.520%.
Meanwhile, the turmoil in the Japanese bond market and rising inflation data in the UK have further pushed up global yields. Against this backdrop, the most pressing question for investors has become very simple: when will the stock market start to react to rising bond yields?
According to Goldman Sachs' analysis, the answer is: right now!
The firm found that when the 10-year U.S. Treasury yield rises by 2 standard deviations within a month, meaning a rise of about 60 basis points to 4.75-4.80%, it could impact the stock market.
Historically, it is not just the absolute level of yields that affects the stock market; the speed of the increase is also important.
This means that if the current upward trend in U.S. Treasury yields continues, it may soon reach a critical level that impacts the stock market.
In other words, we are very close to the critical point
