Gary Black
Co-Founder & Portfolio Manager of The Future Fund
Tesla, AeroVironment and Palantir are hit hardest by rising Treasury yields because they are long-duration stocks. The 10-year yield has climbed from 3.95% before the war started to 4.33%. If Brent crude stays elevated, higher yields may persist and losses may continue; if the war suddenly ends, these stocks could rise the most. 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
Potential spending cuts and AI-related deflation make long-dated US Treasuries an asymmetric opportunity. A Democratic sweep could cut spending; an AI-trade blowup could cause deflation, while the AI trade hurts employment. Ending the Iran war could reduce spending and oil prices. Further crude gains could damage the economy hard and quickly enough to outweigh the inflation threat. x.com x.comÂ
Defense stocks such as Kratos, AeroVironment, Ondas, Northrop Grumman and L3Harris are trading as if global leaders had turned into pacifist hippies, which is probably not the case. x.comÂ
Crude oil and the XLE energy-sector ETF would be buys on a pullback because uncertainty over a real military strike could hang over the US market from the midterms through year-end. Only an actual strike or a true peace deal would settle that uncertainty. x.comÂ
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
ServiceNow, Palantir, SoFi, Robinhood and Arm benefit as markets price a world without Middle East war and with lower oil, rotating from AI into software and other names. Trump is best placed yet to reach an Iran deal; oil in the mid-$70s would ease inflation in coming months, and rates could fall by year end as companies post record profits and indexes hit new highs. An escalation in Iran could bring a near-term drop in equities. 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
US stocks should find support in October as escorted Gulf oil shipments ease oil-driven pressure on yields while AI fundamentals stay strong. Tankers crossing Hormuz under US escort have restored at least 60% of prewar crude flows, weakening oil's upside. At 5.33%, 10-year yields may stabilize; per Bloomberg data, yields would need to hit about 6% to erase a year of bond returns. Q3 cloud earnings should be very strong, and if yields settle, gains could spread to banks and small caps. x.com … Show more
US stocks are on sale and should rebound hard once the US-Iran war ends, likely within three months and possibly by early April, since Trump wants it over fast. Until then, the S&P 500's broken 200-day average near $660 is resistance; holding $650-$653 allows a bounce, while losing it opens $644. A VIX spike to 30-40 marks peak fear and the time to scale in, as it rarely stays above 30 for 15 days. Nvidia, Tesla, Alphabet and Microsoft are rebound plays, Alphabet with AI tailwinds. x.comÂ
Long-dated Treasury yields face more upward pressure than in the 1990s, a common comparison. Then, yields were high but falling from the early-1980s Volcker peak, and the US was the sole superpower. Now yields are turning up from their 2020 low, while the Iran war has driven oil-led inflation and exposed weaker US military dominance, denting confidence in Treasuries. Foreigners bought over $940 billion of US stocks in a year while selling Treasuries. Pressure persists until macro tensions ease. … Show more
