The 10-year Treasury yield is moving the 'wrong way' for stocks

Tue, May 19, 2026 at 11:47 AM EDT 1 min read

What happened: The 10-year yield (^TNX) rose about 6 basis points to 4.68% Tuesday, while the 30-year yield (^TYX) rose 5 basis points to 5.2%, hitting its highest level since July 2007.

Why it’s important: Bond yields, which move inversely to bond prices, are going the “wrong way” for stocks, Nomura Securities equity derivatives analyst Charlie McElligott wrote in a note on Tuesday.

As Yahoo Finance’s Jared Blikre has written, yields on both the 10-year and 30-year Treasurys are testing key psychological levels for investors, who are weighing the impact of inflation from the surge in oil prices on global growth.

Read more: What is the 10-year Treasury note, and how does it affect your finances?

What else you need to know: The sell-off in bonds began in late February, when the war in the Middle East broke out, driving oil prices to their highest levels in years. The stock market, buoyed by strong earnings, climbed to record highs in recent weeks.

But now, the 10-year yield is well above 4.5%, a level that serves as “a noticeable headwind for equity multiples,” Morgan Stanley’s Michael Wilson wrote this week. Meanwhile, the 30-year has also moved well above 5%, and stocks are beginning to feel some pain.

“I think the simple thing is that if rates don’t go down here, the [price-to-earnings] multiple [on the equal-weighted S&P 500] is not going to rebound higher, and it’s going to get more difficult and challenging for equities to make gains, even in a strong earnings backdrop,” Piper Sandler chief investment strategist Michael Kantrowitz told Yahoo Finance on Tuesday.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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