Insights

The surge in Treasury yields reflects a stronger economy and higher borrowing demands rather than a significant increase in long-term inflation expectations. While rising rates have weighed on bonds and interest-rate-sensitive sectors, corporate earnings remain strong, credit markets show little evidence of widespread stress, and today’s yields are not historically unusual.

The benchmark indexes closed lower last week, snapping a multi-week winning streak. Despite a rally last Friday, stocks retreated in response to elevated Treasury yields, rising crude oil prices, mixed corporate earnings, and weakness in key tech and mega-cap shares.