The rise in US Treasury bond yields could trigger a collapse in the stock market. Analysts warn about the vulnerability of stocks in this scenario.
The yields on 10-year Treasury bonds have reached 4.85%, approaching critical levels that could negatively affect the stock market. According to expansion.com, US Treasury Secretary Scott Bessent has announced a bond buyback worth $6 billion, however, this has not prevented the rise in yields.
Experts like Michel Lerner from UBS Holt suggest that high bond yields could lead to a decline in stocks. Lerner states:
“History suggests that episodes of speculation with bonds are rarely controllable.”
The situation becomes more complicated when considering that, in the last 300 years, all major bubbles have ended when borrowing costs rise significantly, as noted by Ruchir Sharma from Financial Times. He argues that
“the key indicator is the yield on 10-year US Treasury bonds”, and warns that if it exceeds 5%, it could trigger a crisis similar to the tech bubble.
Furthermore, analysts from TS Lombard, Freya Beamish and Davide Oneglia, believe that bond yields should be at least 5% to compensate for the current environment and that the equity risk premium does not seem sustainable. They conclude that
“macroeconomic fundamentals suggest that yields must return to normal.”
The impact is not limited to stocks; it also affects the real estate sector, which is already showing signs of a slowdown. Ajay Rajadhyaksha from Barclays explains that spending on data centre construction in the US has grown to $85 billion in 2026, which has offset weakness in the residential sector. However, he warns that this type of spending is not sustainable in the long term.
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