Anndy Lian
Intergovernmental Blockchain Adviser, Investor/Author, Web4 & AI
US stocks face pressure from rising yields and rate-hike anxiety as elevated oil keeps inflation fears alive. A global bond selloff deepened, the 10-year Treasury yield moved toward 5.2% and the 30-year touched levels last seen in 2004. Higher yields pressure stocks, bonds and borrowing costs, keeping US investors cautious; the S&P 500 edged lower and the Dow fell 0.3%. x.comÂ
US equity upside looks contained as investors weigh geopolitical hope against structural vulnerabilities. Global trade remains fragile, per UNCTAD, with rising trade costs and Middle East disruptions persisting. A two-week US-Iran ceasefire drove volatility: WTI fell 4% to just above $108 and the 10-year yield eased to 4.30% as safe-haven demand persisted, while the S&P 500 gained only 0.08% for a fifth straight up day. x.comÂ
Persistently high yields would make borrowing more expensive and pressure US stocks, housing and the government. Treasury tripled its bond buyback to $6 billion, yet the 10-year yield climbed to 4.85%, its highest since November 2023, after last month's doubled $4 billion buyback had cut the 30-year yield by nearly 10 basis points. Oil above $100, rising US debt and inflation fears are pushing yields higher. x.comÂ
The 10-year yield above 5% limits how far the US equity rally can stretch, even as stocks shrugged off the Fed hold. Two policymakers wanted a hike, the 10-year rose to about 5.04%, and bonds sold while all four major indices closed higher. Rates need to cool for the rally to extend. x.comÂ
US stocks benefit when rates rise with growth because earnings outpace the drag from higher discount rates. Such periods have historically been very bullish, unlike inflation-led rate rises amid slowing growth. Since fall 2025 the 10-year yield rose from 4.1% to 5.1% while nominal GDP growth accelerated to 6.6%, faster than rates. Being long offers better risk/reward; high oil prices due to the war are the remaining inflation pressure, and an end to the war would improve the setup further. x.comÂ
US large-cap equities look stretched as the S&P 500's 4.7% earnings yield sits below the 5.2% Treasury yield, the first extended stretch since 1999-2000. 2026 EPS estimates imply 32% growth and a 21.2x P/E. The 10-year yield hit 5.28%, its highest since 2007, which pressures long-duration, high-P/E stocks most. Since recent inflation is mostly an oil supply shock, yields could fall once the war with Iran ends and Brent eases. x.com x.comÂ
US stocks face a quiet but serious risk from the bond market, where the 30-year Treasury yield hit its highest level since 2007. Rising yields act like a slow tax, making borrowing costlier and pulling money from stocks; they reflect heavy borrowing, sticky inflation and a flood of corporate debt. The government had to announce large buybacks of long-term bonds to push yields down, which worked for now. A high yield is not a crash by itself, but it is a warning light. x.comÂ
The Iran war, rising oil prices and inflationary pressure do not yet look severe enough to trigger a major economic crisis. Despite some deterioration in the macro picture and short-term volatility, the broader picture remains relatively healthy and the long-term outlook for US large-cap and Nasdaq 100 stocks is very positive. x.comÂ
US stocks face a tougher stretch ahead, warranting patience. A hawkish Warsh caused a bear flattening of the yield curve, and the 30-year yield recently hit its highest since 2007. A Fed hike on September 16 looks likely because the October meeting falls just before the midterms. September has the worst seasonality, midterm years are worse than normal, and bipartisan pushback on data-center expansion pressures AI infrastructure. A Venezuelan oil deal may lower oil prices near term. x.com x.com … Show more
US stocks face a potentially bigger selloff as rising inflation compounds concerns about AI spending. PCE inflation reached a four-month high of 3.6%, increasing pressure on the Fed to raise rates; Alphabet shares fell after disappointing earnings, slowing ad growth and more than $51 billion of quarterly capital investment. x.comÂ
Far less inflated valuations and significant AI earnings make US equities unlike the dot-com market top. AI/SI spending may still be overexuberant. Rates and yields have returned to historical averages; more oil through the Strait of Hormuz and from OPEC and Russia should lower oil and inflation. The market may not have bottomed yet, but falling yields, steady rates and the midterms passing should let it climb the wall of worry. x.com x.com x.comÂ
US stocks face a black swan as the 30-year Treasury yield broke above 5.3%, its highest since June 2007. Higher long yields lift borrowing costs for households and companies, act like a rate hike before the Fed moves, and pull money from stocks into Treasuries. Yields are rising on heavy AI corporate debt issuance and surging US deficits, with $40 trillion of government debt costing about $1 trillion a year in interest. AI hardware sold off: SanDisk -9%, SK hynix -8.6%, Micron -7.3%. x.comÂ
