How High Can Yields Go Before Equities Break?
How high can yields go before equities break?
Everyone fears higher Treasury yields, but JPM argues the S&P 500 may be more resilient than investors think. With earnings growth running at extraordinary levels, equities could potentially withstand 10-year yields approaching 6%. Corporate balance sheets provide another cushion, with most debt locked in at fixed rates. But beneath the index, the picture is less comfortable. Smaller companies, rate-sensitive sectors and debt-funded AI infrastructure face a very different reality. The next big rates trade may be less about shorting the market and more about identifying where the pain will show up.