Treasury yields pressure stocks as Fed decision looms

Treasury yields pressure stocks as Fed decision looms

Key takeaways

- Bruce Campbell says 10-year yields have reached levels not seen since 2007, creating another valuation headwind for U.S. equities.

- Market pricing cited by Campbell implied a 93% probability of a 25-basis-point Federal Reserve rate increase ahead of the latest meeting.

- Energy remains relatively strong as oil prices rise, while financials and utilities are weakening and technology remains in a softer momentum position.

- U.S. consumer staples are beginning to improve, giving investors another signal to watch for evidence of a broader shift toward defensive positioning.

Bond yields are back at the centre of the market conversation, and the implications extend well beyond the fixed-income market.

In the latest Markets in Motion, StoneCastle Investment Management portfolio manager Bruce Campbell examines the rise in 10-year yields, what the bond market could be signalling about Federal Reserve policy and how higher rates are reshaping sector leadership.

Campbell says the 10-year yield has reached levels not seen since 2007. Higher yields matter for stocks because they influence valuations, borrowing costs and the ...